Gary Gensler, the Chair of SEC is facing criticism for his regulatory approach. A contentious proposal requiring “qualified custodians” for clients’ crypto assets has drawn backlash from JPMorgan.
The SEC’s attempt to impose its own conservative and outdated model on the crypto industry has been met with widespread opposition. Gensler’s bold claims leads to excluding investment firms from the sector and impeding its growth.
Genslers rule has been heavily criticized, withJPMorgan accusing the SEC of a faulty approach that could hurt the crypto industry. Is Gensler guilty of jurisdictional overreach?
Gensler’s at SEC is a series of crazy missteps, including the unresolved Ripple lawsuit, failure to prevent FTX’s crash, and inaction against Terraform Labs despite known risks. Actions against Justin Sun and Coinbase have come out of the blue, fueling the perception of the SEC prioritizing punishment over clear regulatory guidance.
The SEC’s battle with bluechip exchange Bittrex, shows the regulator’s outdated methods. Instead of collaborating to ensure compliance, the SEC has chosen litigation, harming the crypto industry’s reputation.
Bittrex’s U.S. entity and Bittrex Malta have filed for Chapter 11 bankruptcy following the closure of their U.S. operations and a lawsuit from the SEC. The bankruptcy filing cites a “lack of regulatory clarity” as a contributing factor.
Bittrex intends to wind down its operations and repay customers’ funds using a debtor-in-possession loan from their parent entity. The company’s debts primarily consist of fines imposed by U.S. government agencies, with the Office of Foreign Assets Control and the Financial Crimes Enforcement Network being the largest claimants.
The bankruptcy filing is viewed by some as an attempt to prioritize customer repayment while avoiding government payment. The response of government agencies to this strategy is yet to be determined.
In conclusion, Gensler’s leadership, the proposed custody rule, and the SEC’s enforcement actions have raised concerns about the regulator’s understanding and approach to the crypto industry. The SEC’s confrontational stance, exemplified by the legal battle with Bittrex, hinders innovation, hurts trust, decreases the inherent strength of American crypto and poses a risk to the U.S.’s potential as a crypto leader.
Microcap and Nanocap Crypto 
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