Gary Gensler is openly at war with crypto. Hopes were up in the industry when he was initially appointed as chairman of the SEC, given his background. Gensler was an MIT blockchain professor. The community expected a more nuanced approach from someone with one foot inside, but his recent words and actions show a much more aggressive stance.
It's been some busy weeks for Gensler and the SEC. After probing Uniswap and going after Coinbase for its staking service Lend (and winning), the SEC chairman appeared in front of the Senate and the media -Washington Post- and sent some clear messages to the industry.
- As a broad statement, Gensler thinks the current regulation is clear enough, and it's time for companies to comply.
- He claims that "many" tokens have the attributes of investor contracts or securities and should therefore be registered as such. He suggests exchanges and lending platforms should voluntarily register soon
- He considers stablecoins "poker chips" and expects them to be soon regulated. (How? Read here about the 5 possible approaches outlined in a New York Times article). In the meantime, the Treasury Department, headed by crypto foe Janet Yellen, is currently working on a report to the President’s Working Group on Financial Markets
Regulation is very likely to make a stellar appearance in the US any time soon. The lowest hanging fruit for regulators seems to be centralized exchanges and stablecoins. And a careless approach could deliver a blow to DeFi too. Nevertheless, we believe that the ecosystem is already too strong to fall and that the downside of regulating poorly is so big that not even US authorities are interested in it.