The US Securities and Exchange Commission filed suit against Binance and Coinbase in separate actions this week. There has been a tendency to personalize these actions as being the work of Chairpersonman Gary Gensler.
“Rock, paper, scissors? I have the rock! I am the bloody ROCK!”
In the context of “knowing one’s adversaries” — who is this guy?
Gensler walked out of the University of Pennsylvania’s Wharton School with a summa cum laude degree in Economics in three years.
He followed that with a Masters of Business Administration from the same august university.
Whilst at Penn, Gensler was the coxswain on the school’s mens’ crew losing weight to the tune of being 112 lbs to ensure the boat met weight standards.
While there is much to discuss as it relates to Gensler’s career — and his last two years as the Chairman of the US SEC — it is important to know he was the Chairman under President Barack Obama of the Commodity Futures Trading Commission for five years and has a detailed knowledge of the history and regulatory turmoil of stock derivatives.
Gensler was involved in both the writing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010, but also the CFTC rules — 68 in all — implementing many of the new laws.
The CFTC is the governmental agency many crypto folks would like to be the regulatory home of crypto which would require crypto be considered to be a commodity, a hard pull right now.
This Gensler person knows more about the CFTC than the crypto boys will ever know.
Gensler has served in the following regulatory or governmental finance positions:
Chairman, US Securities and Exchange Commission for two years
Chairman, the Commodity Futures Trading Commission for five years
Under Secretary of the Treasury for Domestic Finance for two years
Assistant Secretary of the Treasury for Financial Markets also for two years
It is worth noting that Gensler worked for Senator Paul Sarbanes, the then Chairman of the Senate Banking and Finance Committee, and was a senior advisor and substantive author of what became the Sarbanes-Oxley Act in the wake of the Worldcom and Enron scandals.
The FTX fiasco casts a similar shadow.
Gensler also was at the helm during the Libor Investigation that charged a number of banks with manipulating the London Interbank Offering Rate (similar to the US Prime Rate) that resulted in a $450MM fine for Barclays Bank.
Not only is he a seasoned regulator and investigator, he is a salty writer of regulatory law and rules and has been directly involved in writing the most substantial regulations in the last decade.
Before government service, Gensler worked for Goldman Sachs for 18 years, making partner in a short period of time at age 30. He is not a government dweeb who has never worked in the private sector.
At Goldman, Gensler was a topflight M & A guy who made the transition to trading whilst running the firm’s Tokyo fixed income and currency trading shop.
He was the head of the team that negotiated the first big NFL $3.6B TV rights deal.
Gensler left Goldman to go to work for the Clinton admin in the Treasury.
Gensler was an award-winning Massachusetts Institute of Technology Sloane Scho0l professor, as well as a senior adviser to the MIT Media Lab Digital Currency Initiative.
He has, literally, been teaching blockchain subjects and the development of crypto as well as digital currencies, financial tech, and public policy — all before he took the US SEC Chairman job.
Gensler is a Democrat and has been involved in partisan politics at the highest level lastly as Chief Financial Officer of the Hillary Clinton presidential campaign wherein he was implicated as being knowledgeable in the payment for services related to the Russian Dossier.
He was the Treasurer of the Maryland Democrat Party for two years and worked as a senior adviser to the Hillary Clinton and Obama campaigns.
In the last two years, it seems like the US SEC has been involved in everything from ESG (environmental, social, governmental) initiatives to crypto and Musk, greenwashing, and de-centralized finance, but no issue has been as important as the issue of “WTF is actually a security and thus under the regulation of the US SEC and Gary Gensler?”
Here is where the tension has bubbled to the surface in a number of US SEC confrontations over crypto that have mostly been wins for the US SEC.
The recent lawsuits against both Binance and Coinbase are indicative of the enforcement focus of the Gensler SEC and folks would be smart to know their adversary as he is accomplished, diligent, skillful, smart, seasoned, and a winner.
Gensler is a long distance runner having finished nine marathons as well as a 50-mile ultra marathon.
He has climbed and summitted Mount Kilimanjaro and Mount Rainier.
The United States Securities and Exchange Commission is not playing — never were — in their enforcement of their regulations in the crypto arena.
The crypto Illuminati can whine all they want that the US SEC has not given them sufficient custom guidance, but the SEC thinks the laws are clear.
Crypto – talking to you, Brian Armstrong and Changpeng Zhao (CEOs of Coinbase and Binance) — is not “negotiating” with the US SEC or Gary Gensler. Y’all are fighting for your life and wealth.
Brian Armstrong, co-founder and CEO of Coinbase, and one of the smartest guys in crypto completely misunderstands the nature of the US SEC and who he is up against.
This Gensler guy is a killer and intends to put y’all out of business.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.
