hold or not - Gary Gensler As Possible Treasury Secretary: Crypto's Crossroads Or New Beginning?

Rumors are circulating in Washington, D.C.

Securities and Exchange Commission (SEC) Chairman Gary Gensler is a likely nominee for Treasury Secretary if Vice President Kamala Harris secures the U.S. presidency.

This possibility raises a crucial question: What would Gensler's departure from the SEC mean for the cryptocurrency industry?

Gensler's Impact

During his tenure as SEC chair, Gensler has taken a hard stance on the cryptocurrency industry, leading to numerous lawsuits and creating a challenging regulatory environment for digital assets.

It’s worth mentioning that the sector’s most prominent leaders have been under legal scrutiny:

The agency hit Coinbase with an enforcement action on charges of operating an unregistered securities exchange; the company has also sued the SEC.

Three Arrows Capital, once a prominent crypto hedge fund, collapsed shortly after the Luna and TerraUSD crash; entrepreneur Do Kwon was subsequently found liable for fraud.

Sam Bankman-Fried's FTX saga led to the entrepreneur getting sentenced to 25 years in prison.

Former Binance CEO Changpeng Zhao was sentenced to four months in prison.

Gensler’s critics, including House Representative Tom Emmer (R-Minn.), argue that the SEC's approach has hindered innovation and created unnecessary obstacles for the industry.

In a conversation with the Washington Reporter, Emmer stated that Gensler has been “bringing lawsuits all over the place — and losing all over the place,” emphasizing that “Gary Gensler needs to move on. His career in government should be over.”

In reality, the SEC — with Gensler at the helm — has had a string of legal victories.

What Happens if Gensler Leaves the SEC?

If Gensler is appointed Treasury Secretary, the crypto community may wonder what comes next. Speculation has arisen that Gensler could implement a strategic exit plan before the November election.

According to Katie Biber, chief legal officer of Paradigm, a crypto-focused investment firm, Gensler might step down from his SEC role to ensure a democratic majority on the commission by allowing President Joe Biden to appoint a successor.

This plan could involve Gensler taking a commissioner role and paving the way for Caroline Crenshaw, known for her critical stance on the crypto industry, to succeed him.

However, concerns remain about Gensler's influence even at the Treasury. His stance on digital assets could continue to shape broader financial policies, potentially affecting the crypto market.

Critical Players and Confirmation Concerns

Gensler's potential nomination has already stirred reactions from both sides of the political spectrum. While he is expected to receive strong support from Democratic lawmakers, Republicans are preparing for a unified opposition.

Representatives Elissa Slotkin (D-Mich.) and Ruben Gallego (D-Ariz.), who have received backing from the pro-crypto group Fairshake PAC, may play pivotal roles in Gensler's confirmation process. Both representatives have a record of opposing cryptocurrency in Congress, leaving their stance on Gensler’s nomination uncertain.

Benzinga Future of Digital Assets Event

As these developments unfold, the Benzinga Future of Digital Assets event in NYC on November 19 will become an essential gathering for industry leaders. With over 1,000 capital markets participants and thousands of meetings, the event will be a critical opportunity to discuss the future of crypto under possible new leadership dynamics.

Gensler's potential shift to Treasury Secretary brings uncertainty and opportunity for the cryptocurrency industry. Whether his departure from the SEC would mark the beginning of a new chapter for crypto or present further challenges is a topic that will undoubtedly be explored at the upcoming Benzinga event. With so much at stake, this event will serve as a crucial platform for investors and companies to gauge the future of digital assets under changing political tides.

Photo by Third Way Think Tank on Flickr