Rapid disinformation attacks are one of the most significant challenges in the digital ecosystem. This time, the alleged resignation of United States Securities and Exchange Commission (SEC) chair Gary Gensler took the internet by storm.
The news stories ultimately turned out to be a hoax, much to the crypto community’s disappointment. But at the center of the controversy lies artificial intelligence (AI). This essentially means that troubles for XRP, and other crypto assets that have been portrayed as securities by Gensler’s agency, are not over yet.
Gary Gensler’s Exit Rumors
Gary Gensler is one of the few hated figures in crypto. His exit rumors brought much-needed respite to the community as he launched a full-swing offensive on the industry. News stories about Gensler’s resignation hit small crypto outlets over the weekend. The rumor was also picked up as an alert by a Twitter account called ‘whalechart,’ which garnered over 1.6 million views.
But the SEC’s PR team refuted the claims.
Later investigation suggested that the story was generated by artificial intelligence (AI). But that has not stopped the community from pondering the matter and hoping for his eventual exit in the near future.
Messari’s founder and CEO Ryan Selkis said he would not be surprised if Gensler resigns soon and added that the latter’s only political future rests on “bowing out gracefully in order to do this administration a solid in an election year.” He further argued that by pushing Gensler out, the Biden administration can potentially turn nearly 50,000 voters in its favor.
Gensler was appointed as the SEC chair in 2021, and his term ends in June 2026. However, the retirement of Senator Ben Cardin of Maryland in 2024 sparked speculations regarding Gensler, who also hails from the mid-Atlantic state, running for the seat. Selkis previously weighed in that the SEC chief has grim chances of becoming the Treasury Secretary, hence running for Cardin’s Senate seat in Maryland is likely.
What Does Gensler’s Exit Mean For Crypto?
Attorney John Deaton, an amicus or “friend of the court” in the SEC vs. Ripple suit, said the upcoming political campaign could bring in Gensler’s resignation from the securities regulator that has drawn a significant backlash for its enforcement actions against cryptocurrency exchanges and projects in the ecosystem.
The SEC has already been embroiled in a legal battle with Ripple for over two years now. Besides XRP, the agency has considered more than 60 cryptocurrencies securities and filed legal actions against crypto giants like Coinbase and Binance under Gensler.
From being an ally during the MIT days to adopting a tyrannical approach following the SEC’s appointment, Gensler’s views on crypto have been controversial, to say the least.
Hence, if the newly proposed SEC Stabilization Act is passed, the legislation will essentially dismantle the Chairman position and instead create a new role called the Executive Director. Such a move is aimed at protecting the securities agency from having a political agenda.
The lack of regulatory clarity, refusal to greenlight a spot Bitcoin exchange-traded fund, oppressive rules on stablecoins, and regulations on custody and fundraising all promote a regulatory environment that stifles innovation and financial inclusion.
Hence, the removal of Gensler is expected to be welcome news for the entire industry. Even as the lawsuits will continue to play in the court, such a move could tip the scales in the favor of all the companies and entities targeted by Gensler.
But it is important to note that crypto regulation in itself is a complex affair. Experts argue that the SEC is undergoing such a change, though unlikely, could pave the way for even more fraud, market manipulation, and other risks.