SEC Chief makes a comeback English title
Coinbase CEO Brian Armstrong has criticized the U.S. Securities and Exchange Commission (SEC), urging the incoming chairman to cease all “frivolous” lawsuits against crypto companies and issue an apology to the American people. Armstrong also accused the regulator of inconsistency in its classification of crypto assets. He shared a chart on social media showcasing various statements made by SEC officials on the matter, including a quote from former Commissioner William Hinman, who stated in 2018 that digital assets cannot be clearly categorized as securities. This statement and other materials from Hinman have formed the basis of Ripple Labs’ defense in its lawsuit against the SEC.
The conflict between Coinbase and the SEC has been ongoing for several years. In March 2023, Coinbase received a notice from the SEC informing them of its intention to take enforcement action due to possible violations of securities laws. This notice specifically pertained to certain crypto assets on the platform, such as Coinbase Earn, Coinbase Prime, and Coinbase Wallet. In April 2023, Coinbase filed a lawsuit against the SEC, seeking to compel the commission to respond to a request for new regulations to govern cryptocurrencies. However, the SEC requested the court to dismiss the lawsuit, arguing that they were not obligated to promptly respond to such requests. In June 2023, the SEC filed its own lawsuit against Coinbase, naming Coinbase, Inc. and Coinbase Global, Inc., but not Armstrong and other executives. Since then, tensions between the SEC and Coinbase have escalated, with the exchange filing multiple motions for partial summary judgment. Nevertheless, a resolution to the conflict remains elusive.
The crypto community has been at odds with the SEC for several years, and the appointment of Gary Gensler as chairman has further exacerbated the tension. There is active speculation about Gensler’s potential resignation following the 2024 presidential election. Although his term officially ends in January 2026, it is customary for SEC heads to step down with a change in presidential administration. Given Gensler’s controversial stance on digital assets, this development is of great interest to participants in the crypto market. If Kamala Harris emerges as the victor, a new SEC chairman can be expected. On the other hand, if Donald Trump wins, significant changes in regulatory policies toward the crypto industry are anticipated. A change in SEC leadership could usher in a new phase for the American cryptocurrency market, especially considering the current chairman’s critical views on digital assets. Market participants are hopeful for more constructive engagement with the new leadership and the establishment of a more transparent regulatory environment for the crypto industry.
Gensler’s tenure as SEC chairman has elicited animosity from the crypto community. However, not all the measures taken by the commission have been deemed justified. Cryptocurrency issuers have been particularly affected by the sanctions imposed by the SEC. In the United States, there is still a lack of clear rules regarding the classification of digital assets, leading the SEC to rely on its own assumptions. Gensler believes that all cryptocurrencies, except for Bitcoin (BTC), can be considered unlawfully issued securities. Based on this belief, he has compiled a “blacklist” of digital assets, which includes Ripple (XRP) and 68 other cryptocurrencies that the SEC has deemed as unlawfully issued securities. Interestingly, Ethereum, the second-largest cryptocurrency by market capitalization, is not included in this list. The reasons behind this exclusion remain unclear, especially since other cryptocurrencies, like Ethereum (ETH), have been included.
In July, rumors began circulating about who could potentially become the SEC chairman if Trump wins the 2024 presidential election, with Dan Gallagher being considered a leading candidate. Crypto community members believe that Gallagher could replace the current SEC chairman, Gary Gensler, whose policies are not favored by crypto investors. Gallagher previously served as an SEC commissioner from November 2011 to October 2015 and has held various positions, including advising Commissioner Paul Atkins and Chairman Christopher Cox. He also represented the SEC in the liquidation of Lehman Brothers. There are several reasons why Dan Gallagher is seen as a suitable candidate to lead the SEC in the event of a Trump victory. Firstly, he has extensive experience serving in multiple roles within the commission, making him well-versed in its internal processes and policies. Secondly, Gallagher has experience working in a Republican administration that aligns with Trump’s agenda.
In conclusion, Coinbase CEO Brian Armstrong has criticized the SEC and called for an end to “frivolous” lawsuits against crypto companies, along with an apology to the American people. The conflict between Coinbase and the SEC has been ongoing for several years, with no resolution in sight. The appointment of Gary Gensler as SEC chairman has further strained relations between the regulator and the crypto community. However, there is speculation that Gensler may resign after the 2024 presidential election, potentially leading to significant changes in regulatory policies towards the crypto industry. The crypto community has taken issue with Gensler’s classification of digital assets, particularly his belief that all cryptocurrencies, except for Bitcoin, can be considered unlawfully issued securities. The exclusion of Ethereum from the SEC’s “blacklist” has raised questions about the commission’s criteria. If Trump wins the election, Dan Gallagher is seen as a potential replacement for Gensler, given his experience within the SEC and his alignment with Trump’s agenda.
