Gary Gensler, former Chairman of the U.S. Securities and Exchange Commission (SEC), has responded to the SEC’s surprising decision to drop its legal cases against prominent cryptocurrency companies, including Ripple, Coinbase, and Kraken. This marks an unprecedented move for the SEC, which has notably retreated from its legal battles with major players in the crypto space.
The SEC’s recent action includes halting its long-running Ripple lawsuit and withdrawing its cases against leading exchanges like Coinbase and Kraken, a significant shift in regulatory strategy. In a recent interview with CNBC’s Andrew Ross Sorkin, Gensler refrained from commenting on specific cases but shared his broader views on the cryptocurrency market.
Gensler noted that “almost 99% of the crypto field is based on sentiment,” emphasizing the inherent volatility of assets driven largely by public hype. He cautioned that such assets often face unfavorable outcomes, asserting, “If this is just about sentiment, then, generally, those don’t end up well, and most then go down.”
However, Gensler acknowledged that Bitcoin might stand apart from other cryptocurrencies due to its widespread and sustained public interest. “Something like Bitcoin might exist for a very long time because there is a real keen interest in it,” he said, suggesting that Bitcoin could have staying power unlike many of its counterparts.
Drawing a comparison between cryptocurrency and precious metals like gold, Gensler explained that humanity tends to focus on a small number of valuable assets over time. “I don’t think we humans will have a fascination with 10 or 15,000 meme or sentiment tokens trading over the years,” he added.
Despite his mixed views on the broader crypto market, Gensler’s approval of Bitcoin exchange-traded funds (ETFs) in the U.S. has provided Bitcoin with greater legitimacy among institutional investors. Still, Gensler’s legacy remains contentious within the crypto community, primarily due to the SEC’s aggressive “regulation by enforcement” approach during his tenure.
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