As the inauguration of US President-elect Donald Trump approaches, the countdown to the departure of Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), has also begun. Over the past four years, his law enforcement actions against the cryptocurrency industry have sparked widespread discussion, and the public is also curious about his career plans after leaving office. Recently, Gensler has also given intensive interviews with major media outlets, not only sharing his important achievements during his tenure but also discussing the future direction of cryptocurrency and AI regulation.
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ToggleEarly Days in Office, from GameStop to Capital Market Reform
Gensler took office in 2021, at a time when the GameStop stock frenzy and the rise of special purpose acquisition companies (SPACs) were occurring. To stabilize the market and increase transparency, he reformed the stock market, reducing the settlement period for stocks from two business days to one day to improve market efficiency. He also required brokers to promptly notify users of data breaches to protect the rights of investors.
Regarding the government bond market, Gensler collaborated with Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell to undertake structural reforms on the $28 trillion US government bond market, enhancing market stability and liquidity. Gensler stated that these reforms received bipartisan support and laid a solid foundation for the healthy development of the market.
Focusing on Cryptocurrencies, Strict Regulation Sparks Controversy
The cryptocurrency industry was another major focus during Gensler's tenure, but his strict regulation and law enforcement actions have sparked considerable controversy. Gensler believes that BTC and ETH are not securities, but thousands of other tokens need to comply with securities laws and provide full disclosure.
During Gensler's tenure, the SEC has also initiated more than 100 enforcement actions against the cryptocurrency industry. The most widely known case is the legal dispute between the SEC and the prominent exchange Coinbase, which began in 2023 and was only temporarily halted by a New York district court on 1/8 this year, putting an end to the more than 2-year legal tug-of-war.
Gensler emphasized that most cryptocurrency market investments rely on emotional trading and lack fundamental support, and the SEC's core mission is to ensure that investors have complete information and avoid harm to their rights.
The Challenges of AI and FinTech
Not only for cryptocurrencies, Gensler pointed out in the interview that the impact of AI on the financial industry is growing rapidly, but it also brings many risks. He stated that if the design of AI algorithms prioritizes the interests of brokers over investors, it will undermine the fairness of the market.
Furthermore, Gensler emphasized that if the industry becomes overly dependent on a few AI models, it will create a single point of risk, making the entire financial system vulnerable. "Although AI will greatly improve productivity, it's a pity that I couldn't do more regulation on AI during my tenure," Gensler regretfully stated.
Risk Warning
Cryptocurrency investment is highly risky, and its price may fluctuate dramatically, and you may lose your entire principal. Please carefully evaluate the risks.
