In a recent interview, former SEC Chairman Gary Gensler shared his views on the U.S. Securities and Exchange Commission’s (SEC) surprising decision to drop its lawsuits against prominent cryptocurrency companies such as Ripple, Coinbase, and Kraken. This marks an unusual retreat for the SEC, which has typically taken a strong stance on cryptocurrency regulation.
The SEC recently withdrew its appeals in the ongoing Ripple case and also dismissed legal actions against major cryptocurrency exchanges, including Coinbase and Kraken. The move has left many industry players questioning the agency’s sudden shift in approach.
In his conversation with CNBC’s Andrew Ross Sorkin, Gensler acknowledged the celebration from crypto executives following the case dismissals but chose not to comment on the specifics of the lawsuits. Instead, he offered broader insights into the cryptocurrency market, stating, “Almost 99% of the crypto field is based on sentiment.”
Gensler cautioned that assets driven mainly by public hype often face poor long-term prospects, remarking, “If this is just about sentiment, then, generally, those don’t end up well, and most then go down.” Despite this, he recognized Bitcoin as a potential exception due to its enduring public interest. He noted, “Something like Bitcoin might exist for a very long time because there is a real keen interest in it.”
Drawing comparisons between the crypto market and precious metals like gold, Gensler suggested that human fascination with valuable assets tends to be limited. He stated, “I don’t think we humans will have a fascination with 10 or 15,000 meme or sentiment tokens trading over the years.”
Though Gensler approved the launch of Bitcoin ETFs in the U.S., contributing to the cryptocurrency’s institutional legitimacy, his tenure at the SEC has been marked by controversy. Many in the crypto community have criticized the SEC’s approach of “regulation by enforcement,” which Gensler led during his time as Chairman.
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