John Deaton, an XRP lawyer described Gensler as a “bad faith regulator” and suggested that the Biden administration might eventually view him as a political liability. Deaton has expressed concerns on Twitter regarding Gary Gensler, the current Chair of the US Securities and Exchange Commission (SEC):
@GaryGensler didn’t care about regular people during MF Global when he was Chairman of the @CFTC and he certainly doesn’t give a 💩 about retail investors as Chair of the SEC. He’s a bad faith regulator. Hard stop. At some point Biden’s team will realize Gensler has become a… https://t.co/0Cv2IKkwRH
— John E Deaton (@JohnEDeaton1) June 23, 2023
Deaton accused Gensler of neglecting the interests of regular people during his tenure as Chairman of the Commodity Futures Trading Commission (CFTC) and claimed that he shows little regard for retail investors in his current position.
The recent collapse of the FTX exchange has triggered a significant regulatory crackdown on the cryptocurrency industry. The SEC has filed civil charges against Binance and Coinbase, the two largest crypto exchanges globally, alleging their failure to register as securities exchanges with the regulator.
However, the absence of a robust regulatory framework for cryptocurrencies exposes US crypto investors to risks, particularly in the case of Binance. The SEC has alleged that Binance mixed billions of dollars in customer funds together. The responsibility to establish a regulatory framework lies with SEC Chair Gary Gensler, but critics argue that he has not taken appropriate action.
As recently as May 2021, Gensler admitted in Congressional testimony that there was no regulatory framework for crypto exchanges to register with the SEC. However, following the collapse of FTX in December 2022, Gensler changed his stance, urging crypto exchanges to register with the SEC. However, crypto exchanges cannot currently register as securities exchanges due to the SEC’s regulations that hinder such an action, according to a report by the Committee on Capital Markets Regulation (CCMR), a non-profit organization.
It is noteworthy that a crypto exchange cannot trade anything unless it is registered as a securities exchange. Only crypto assets registered with the SEC as securities are allowed to be listed and traded on registered securities exchanges.
