During his speech at Bitcoin 2024, incoming US President Donald Trump promised to fire Gary Gensler as Chairman of the Securities and Exchange Commission (SEC).

“On day one, I will fire Gary Gensler and appoint a new SEC Chairman,” he declared to uproarious applause. “I didn’t know he was that unpopular. Let me say it again. On day one, I will fire Gary Gensler.”

Although there are some formalities to removing Gensler from office without showing cause — including the possibility of a legal challenge by the SEC itself — his resignation or involuntary departure seems likely at some point during 2025.

With Howard Lutnick co-chairing Trump’s presidential transition team and making recommendations for his replacement, several rumors have circulated about potential contenders.

Here are some popular guesses for candidates who might earn Trump’s endorsement to lead the SEC.

Read more: Trump discovered he was winning via Polymarket, says CEO

Hester Peirce

Currently one of five sitting SEC Commissioners, Peirce is well-known for her pro-crypto stance. She is often a dissenting vote in enforcement actions and publicly bemoans majority decisions by other commissioners, for example, to sue Coinbase, Ripple, Telegram, and others.

Nicknamed “Crypto Mom” by her fans in the industry, Peirce is an obvious candidate given that she already serves on the commission.

Brian Brooks

Brooks is another clear candidate for SEC Chair after Gensler vacates his seat. Brooks is the former Acting Comptroller of the Currency, a powerful bureau of the US Treasury, and a prominent executive in the crypto industry.

He briefly served as CEO of Binance.US and, importantly, saved face by resigning after only a few weeks on the job after he realized that Changpeng Zhao (CZ) was not complying with the Bank Secrecy Act (BSA). CZ later pleaded guilty to criminal violations of the BSA.

Read more: Gary Gensler and SEC probed over alleged politically-biased hiring

Chris Giancarlo

Giancarlo, the ex-Chairman of the Commodity Futures Trading Commission (CFTC), is one of two ex-CFTC leaders who is in line for a possible SEC Chair appointment. Giancarlo has favorable views on blockchain technology and is a co-founder of the Digital Dollar Project.

During his CFTC tenure, he approved the listing of bitcoin futures on the CME, defended his “Do No Harm” regulatory approach towards crypto in front of Congress, and earned the nickname “Crypto Dad.”

Heath Tarbert

Tarbert, like Giancarlo, is an ex-CFTC Chairman. Tarbert left the CFTC in 2021 to work for Citadel, a major market maker. Currently, Tarbert is the Chief Legal Officer and Head of Corporate Affairs at Circle, the issuer of the world’s second-largest stablecoin, USDC.

Paul Atkins

Atkins is a former SEC commissioner and currently co-chairs the Token Alliance, a pro-crypto advocacy group. He also runs a for-profit crypto consultancy, Patomak Global Partners.

Read more: Here’s why ‘news’ attacking Gary Gensler is all over crypto media

Dan Gallagher

From 2011-2015, Gallagher was a commissioner at the SEC. Nowadays, he is Chief Legal Officer at Robinhood. Both positions earned him positive reviews from the crypto community. He has maneuvered Robinhood’s crypto listings through SEC disclosures, emphasized the need for Congress to establish a regulatory framework for digital assets, and positioned himself as an advocate for responsible crypto innovation.

These candidates for SEC Chair are far more crypto-friendly than Gary Gensler. Although any appointed Chair must gain Senate confirmation, it’s likely that Trump will choose a pro-crypto government or business worker for the role, as opposed to Gensler’s famously anti-crypto stance.

Again, it’s worth reiterating that while Trump has expressed intentions to replace Gensler on “day one,” he must either show cause for job termination or risk a legal challenge to his expulsion by the Commission.

Currently scheduled to continue serving until June 2026, the particular process for removing Gensler from his leadership seat at the SEC remains unclear.

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The post Who’s in line to replace Gary Gensler at the SEC? appeared first on Protos.

Republicans on congressional committees are probing Gary Gensler and the Securities Exchange Commission (SEC) for allegedly hiring the SEC’s Director of Trading and Markets based on their left-wing political ideology, alleging violations of the Civil Service Reform Act of 1978.

The letter alleges that Gensler may have been influenced by the “political affiliation” of Dr. Haoxiang Zhu when hiring him. 

They highlight an email Dr. Zhu sent after he called Gensler to discuss his employment. It claims Dr. Zhu affirmed “his ideological suitability” when he sent this email, “I believe I’m in the right place on the political spectrum, and I’m happy [to] provide as many details as needed so you feel comfortable.” 

Dr. Zhu was hired six months later, on November 19, 2021. The letter claims that the SEC “unlawfully” considered a bureaucrat applicant based on their political ideology, violating its own impartiality and the Civil Service Reform Act.

Read more: Fake news: SEC thinks NFTs are securities

It also claims that the SEC has a history of “hiring of individuals from left-leaning organizations to fill senior roles,” in order to back up its argument. 

The letter, dated September 10, was jointly signed by the Judiciary, Financial Services, and Oversight and Accountability committee chairmen Jim Jordan, Patrick McHenry, and James Comer respectively. These three are all Republicans.

The SEC has been asked to provide documents and communications from April 17, 2021, and has been given a September 24, 2024 deadline.

It should cover, “the SEC’s decisions to hire, employ, terminate, or transfer any director or associate director of an SEC Division or Office, or a staff member in the Chair’s office,” and, “the SEC’s consideration or evaluation of the political affiliations or political ideology of an applicant for employment with the SEC, including but not limited to Dr. Zhu.”

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The Securities and Exchange Commission (SEC) has accidentally uploaded Gary Gensler’s draft speech on the “public good of disclosure“ complete with suggested tweaks and notes.

The speech, posted to the SEC’s website today, was prepared for the Peterson Institute for International Economics and archived by users online. It features internal comments that show edits on repetitive sentiment, “diplomatically helpful” suggestions, and general cuts to the speech. 

For instance, after a line about large financial institutions restructuring “in the face of a potential failure,” an edit suggests, “I strongly recommend that a sentence be placed here (or somewhere in the first part of the speech) to reassure markets that you are not making the speech because you think there is an imminent crisis” (emphasis ours). 

Another edit suggests, “It may be diplomatically helpful to acknowledge that we have had constructive dialogues with many regulators,” before highlighting that the UK’s Bank Of England has been “particularly constructive.”

Read more: Fake news: SEC thinks NFTs are securities

After describing a goal to help taxpayers avoid the brunt of a systemically important financial institution’s restructuring, the speech reads, “The best way to achieve that is through robust disclosures that meet market expectations, not just legal requirements.” This line is described as a, “Key sentence, Great!”

Overall, there are at least 44 various edits in the Gary Gensler speech uploaded by accident to the SEC website. The original link now displays, “Error 403: Forbidden.”

Another blunder from the SEC happened at the start of this year, when the SEC’s X (formerly Twitter) account was hacked and posted a fake Bitcoin ETF approval that ultimately preempted its actual approval. 

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Bitcoin Magazine, Wendy O, Mario Nawfal, Wayne Vaughan, and other influencers revealed the disturbing extent of crypto’s pro-Donald Trump bias by brazenly publishing fake news about US Presidential candidate Kamala Harris.

The news was a supposed scoop that Harris would, if elected President, nominate Securities and Exchange Commission (SEC) chair Gary Gensler as US Treasury Secretary.

However, she has never said that. Indeed, multiple members of Congress familiar with Harris’ shortlist of treasury secretary candidates have pointed out that her supposed selection of Gary Gensler was false.

But, undeterred by fact checks, the influencers in question refused to remove their debunked posts. Crypto fans retweeted the fake news thousands of times, clicked the Like button over 2,600 times on Bitcoin Magazine’s tweet alone, and amplified the lie to millions of additional views.

It’s not difficult to believe that Bitcoiners and many others in the wider crypto community chose to believe the fake scoop because of their predisposition against both Harris and Gensler.

Indeed, Harris’ rival Donald Trump is the only presidential candidate to have spoken at a Bitcoin conference or host a crypto gala. Moreover, while speaking at that conference, Trump received the loudest applause when he promised to fire Gensler — a promise so immediately popular that he repeated it to even louder applause.

Read more: How often does the SEC lose crypto lawsuits?

Reblogging a reblogged blog

Lazily, Bitcoin Magazine reporters didn’t originate this scoop but rather reblogged an article by Matthew Foldi, a Republican candidate for Congress and ex-National Republican Congressional Committee communications worker.

Worse, the publication obscured this fact, citing only “Senate sources” and making debunking the claim prohibitively difficult for the average reader.

Foldi claims to be an investigative journalist, yet his publication history reveals exclusively one-sided propaganda pieces at the Washington Free Beacon. Foldi’s only job there was apparently bashing Democrats.

The origin of the story looks to be a July 23 tweet by Republican Tom Emmer, House Majority Whip. On that date four weeks ago, Emmer tweeted his personal and unsubstantiated opinion, “Many people are concerned that Kamala Harris would appoint Elizabeth Warren or Gary Gensler to be her Treasury Secretary.”

Six days later, Foldi transformed this innocuous speculation into a July 29 article for the Washington Reporter, another pro-Republican publication. At this step of the fake news circuit, Emmer’s July 23 tweet had transformed into a ‘published’ interview between Foldi and Emmer in which Emmer simply repeated his personal speculation that Harris might nominate Gary Gensler or Elizabeth Warren to serve as US Treasury Secretary.

Finally, on August 19, Foldi published a second article, citing his July 29 article, claiming that that ‘citation’ proved that Emmer “warned that Harris may pick Gensler… to serve as her Treasury Secretary.”

As a rhetorical capstone, Foldi titled his article ‘Scoop: Kamala Harris likely to nominate Gary Gensler as Treasury Secretary if elected: Senate sources.’

As far as fake news cycles, it could not be more straightforward. A daisy-chain of citations leads to no factual basis except to fatigue average readers into simply reading and believing the final headline.

Read more: Donald Trump’s tweets moved crypto markets, now he’s back

Anti-Gary Gensler confirmation bias

Foldi’s propaganda worked — not because it was particularly clever, but because of confirmation bias — the psychological tendency to more readily believe information that conforms to one’s preexisting beliefs.

In crypto, it’s popular to dislike Gary Gensler and his work at the SEC. Similarly, Trump has campaigned on a pro-crypto platform, even though he often uses wordplay to deliver non-committal claptrap for his fans.

Combining those two preexisting biases — Trump as the supposedly pro-crypto and anti-Gensler presidential candidate — it was easy for a Republication communications professional to tap into confirmation bias with a fake news story.

Of course, Foldi wrote misleadingly, Harris would obviously be the presidential candidate to make an anti-crypto, pro-Gensler nomination choice if she were to win the race to the White House.

The idea aligns with preexisting Bitcoin and crypto confirmation biases perfectly. It also never happened.

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If anyone spends too much time listening to crypto content creators, they might come away with the impression that the Securities and Exchange Commission (SEC) has lost the majority of its court battles against the industry.

Although Protos has already debunked this widespread misconception, there is one particular judge who has frustrated the SEC’s enforcement of US securities laws on the crypto industry: Analisa Torres.

Docket observers in the Southern District of New York know that signatures from US district judge Torres are anything but a rubber stamp. Her extensively cited and carefully deliberated rulings have upended some of the highest-profile civil actions against the crypto industry.

In so doing, she has checked the powers of chairman Gary Gensler and clarified that some of his views do not reflect the law of the land.

The SEC employs the most workers of any country’s securities regulator. Tasked by Congress to oversee over $118 trillion worth of trades in US equities plus $237 trillion in fixed-income markets, it also reviews financial disclosures of more than 5,000 companies while regulating the activities of more than a million workers employed at 29,000 SEC-registered entities.

Chairing all of this activity is Gary Gensler, the most powerful securities regulator in the world. His views on crypto are pretty clear. Gensler once agreed with his predecessor Jay Clayton when he said “I believe every ICO I have seen is a security.”

Under Gensler’s leadership, SEC enforcement against crypto promoters has prevailed via settlement or court victory in over 95 lawsuits, including 99% of its distinct complaints. However, Judge Torres’ gavel has served as a very important reminder: 99% is not 100%.

From her courtroom, Torres has impacted lawsuits involving Brian Armstrong’s Coinbase, Guo Wengui’s Himalaya and GTV, and Reggie Middleton’s Veritaseum. To be clear, many of her rulings have favored the SEC.

However, her highest-profile crypto lawsuit — and arguably the most favorable ruling in the history of US crypto litigation — partially favored Ripple (XRP).

Analisa Torres changed crypto forever in SEC v. Ripple

Torres’ ruling in SEC v. Ripple Labs Inc. et al. agreed with the SEC that Ripple illegally sold $728 million worth of unregistered securities to institutional investors.

However, Torres ruled that Ripple didn’t illegally offer $757 million worth of unregistered securities via programmatic sales on secondary markets. Nor, according to the judge’s surprise ruling, did Ripple illegally offer $609 million worth of XRP for non-cash compensation like labor.

It was a surprising partial loss for Gensler’s highest-profile lawsuit against the crypto industry.

The crypto community widely broadcast this ruling as a victory for two reasons. First, it slashed Ripple’s financial liability from multiple billions of dollars to almost certainly something in the nine figures or less.

Secondly, it established for the first time that crypto tokens themselves, even if originally sold via unregistered offerings, don’t permanently remain a security. According to Analisa Torres, the SEC’s claim that Ripple sold XRP as unregistered securities on secondary exchanges is false. 

By extension, it is incorrect to automatically assume that even initially illegally launched altcoins trading on secondary exchanges remain unregistered securities. Instead, harmed investors or the SEC must litigate those complaints separately, describing the unique facts and circumstances of each class of token sales.

Crypto wins even more, thanks to Torres

Moreover, in an even more favorable development this week, Torres ruled that Ripple doesn’t need to disgorge its ill-gotten gains. Saving Ripple at least $728 million dollars with that determination, Torres ruled that binding circuit court precedent disallowed disgorgement because the SEC didn’t prove that institutional investors suffered monetary harm from Ripple’s violations.

Indeed, the price of XRP is higher today than most of those illegal sales. Moreover, the SEC didn’t sufficiently establish financial harm to any class party to this lawsuit. According to Torres, the law of the land is not that all illegally obtained money must be disgorged. Instead, there are circumstances when a violator may keep their ill-gotten gains, and Ripple is one of those entities.

Instead, Torres simply ruled that Ripple must pay a modest $125 million civil penalty. The SEC had requested $2 billion.

Read more: Crypto Twitter misinterpreted everything in SEC v. Ripple

Crypto has a new path to compliant fundraising

In summary, Torres’ most recent denial of the SEC’s lawsuit against a major crypto company arrived this week with her drastic reduction of Ripple’s financial penalty and the termination of the US District Court for the Southern District of New York’s deliberation of SEC v. Ripple.

The SEC has the right to appeal the case to a higher court if a court agrees to take the case. Commissioners haven’t commented on that potential.

With this week’s finalization of SEC v. Ripple, Torres has opened a pathway for countless crypto promoters to get around Jay Clayton and Gary Gensler’s once-shared view that “every ICO I have seen is a security.” The SEC tried, and failed, to prove that Ripple’s initial coin offering to retail investors on secondary exchanges was a security.

Perhaps many other offerings are not securities, as well.

Gensler’s career at the SEC will certainly end with an overwhelmingly victorious track record of litigating against crypto defendants. However, an SDNY judge has clarified the law and narrowed Gensler’s overly broad pronouncements.

There are exceptions. Analisa Torres reminds the world that not every altcoin is an unregistered security.

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News that Gary Gensler was going to resign from the SEC went viral last week. Just one problem: AI wrote it. In fact, it was so obviously AI-generated that a researcher was able to confirm its inauthenticity by simply asking another AI. Oh, the irony.

Shortly after, follow-up research and the SEC itself confirmed that news of Gary Gensler’s resignation was fake. Through the thick fog of misinformation, however, one thing became clear: the incident exposed the rabid, anti-Gary Gensler bias of crypto media. 

Indeed, it has never been more popular to hate the SEC chair. The hashtag #FireGaryGensler regularly trends on Twitter. Google search queries for ‘Gary Gensler’ are at all-time highs and contrast sharply against ‘SEC’ searches, which remain mid-range within a multi-year average.

Of course, the timing seems awfully convenient. As chair of the SEC, he and his four commissioners have recently sued the largest crypto exchanges serving US residents, including Coinbase, Binance, and Bittrex. Two of those exchanges employ massive media teams.

Threatened with multi-billion dollar lawsuits, it’s unsurprising that their press teams immediately fired back.

Following the doomed strategy of Kik’s #DefendCrypto campaign (which failed; Kik settled after a devastating series of setbacks in court), Coinbase immediately launched a similarly styled campaign using the ‘shield’ emoji. Coinbase-affiliated users, including Andreessen Horowitz and other venture capitalists, have added a shield emoji in their Twitter profile as a sign of allegiance. The hashtag #DefendCrypto started trending again; the irony lost on newcomers unfamiliar with Kik.

Many shield emoji-donning Twitter users believe the SEC will lose to Coinbase in court, despite commissioners’ nearly lossless track record. Apart from a handful of minor setbacks, such as Hashlets, courts and juries almost invariably side with the SEC in crypto litigation.

Most altcoins are unregistered securities

Furthermore, the SEC recently explained how many of the altcoin issuances promoted by Silicon Valley and venture capitalists were, in fact, unregistered securities. These include überpopular issuances like Solana (SOL), Algorand (ALGO), Cardano (ADA), Binance Coin (BNB), Binance USD (BUSD), Polygon (MATIC), Tron (TRX), Decentraland (MANA), Cosmos (ATOM), Axie Infinity (AXS), and thousands of others.

The SEC has been remarkably clear. “Every single ICO I ever saw was unlawful on multiple levels,” said the founder of the SEC Office of Internet Enforcement.

“I believe every ICO I have seen is a security,” former SEC Chairman Jay Clayton said. Referring to that quote, Gary Gensler affirmed, “I find myself agreeing with Chairman Clayton.”

Classic ad hominem

Venture capitalists’ motivation to attack Gary Gensler has never been higher. Attacking the person making the argument instead of the argument itself is a classic, rhetorical strategy: ad hominem.

Pro-crypto media is pulling out all the stops to attack Gary Gensler personally. ZeroGPT scored the above-mentioned CryptoAlert article about Gary Gensler’s non-existent resignation at a 96.8% likelihood that an AI wrote the article. Binance Feed has published several negative posts and fake news about Gary Gensler.

Heavily-lobbied US representatives Warren Davidson and Tom Emmer have proposed the “fire Gary Gensler” bill. US representative Ritchie Torres joined their criticism. Conveniently, their complaints omit the hundreds of billions of dollars in lost market capitalization of unregistered crypto securities that have declined to near-$0. They also omit the multi-billion dollar profits earned by venture capitalists who sold these now-worthless tokens. Those profits fund lobbying budgets.

Read more: Gary Gensler hasn’t always believed everything but bitcoin is a security

Shark Tank star Mark Cuban accused the SEC of taking “the wrong path to regulate crypto.” Cuban has sung the praises of many altcoins that are now worthless.

A Binance Feed post from June 10 claimed that Gensler took out $2.5 million in short positions on Bitcoin and committed market manipulation. This information originated from an unsubstantiated tweet from Capo WSB. No reliable source confirmed this trade.

Gary Gensler explains unregistered securities offerings

The SEC has explained why it believes Coinbase has operated an unregistered securities exchange, broker, and clearing agency. It has also detailed how Binance and its CEO allegedly operated an unregistered securities exchange and lied about the independence of Binance US.

Many CEOs of troubled crypto exchanges have courted regulators and donated millions into political lobbying in a possible bid for more lenient regulatory enforcement.

Rumors, ‘fake news,’ and all manner of anti-Gary Gensler content are going viral at a convenient time for venture capitalists. Despite the impressive track record of the SEC in court and consistent warnings regarding unregistered securities, Gary Gensler has become the target of ad hominem attacks due to his interest in applying the same regulations that apply to tens of trillions of existing securities to the crypto industry.

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A video has surfaced that purports to show Securities and Exchange Commission (SEC) chair Gary Gensler claiming that a number of prominent cryptocurrencies aren’t securities — a view that’s seemingly at odds with his more recent comments and the regulator’s numerous enforcement actions against the space.

The five-year-old video clip was taken at a Bloomberg event for institutional investors when Gensler was a professor at the Massachusetts Institute of Technology.

In the clip, Gensler says, “Over 70% of the crypto market is Bitcoin, Ether, Litecoin, Bitcoin Cash. Why did I name those four? They’re not securities.”

Read more: Binance wants SEC chair Gary Gensler recused for ‘advising’ the crypto exchange

However, just four years later, he had apparently changed his view and was adamant that “the vast majority of cryptocurrencies” are, in fact, securities. Indeed, earlier this year, he claimed that “everything other than Bitcoin” should fall under the SEC’s remit.

The SEC has, so far, confirmed nearly 70 cryptocurrencies as securities, however, none of those previously named by Gensler are among them.

In 2019, Gensler also seemingly expressed at least some level of admiration for crypto protocol Algorand. However, shortly after, its native token ALGO was deemed by the SEC to be a security. This led some to brand Gensler and his organization as hypocrites.

Read more: Coinbase claps back at SEC proposal, chief exec targets Gary Gensler

The SEC chair further complicated matters around his real views on which cryptos may or may not be securities when he was unable to tell a House Financial Services Committee whether or not ether was a security.

GOP politicians are pushing for Gensler to be fired

Gensler is also under fire from a pair of pro-crypto Republican congressmen who are calling for him to be removed from his role with the SEC.

On Monday, Warren Davidson (Ohio) said via Twitter, “Today I filed the SEC Stabilization Act to restructure the SEC and fire Gary Gensler.

“U.S. capital markets must be protected from a tyrannical Chairman, including the current one.”

Davidson was supported by Tom Emmer (Minnesota) who claims that Gensler has committed “a long list of abuses” and, in a press release published on his website, said, “American investors and industry deserve clear and consistent oversight, not political gamesmanship.

“The SEC Stabilization Act will make common-sense changes to ensure that the SEC’s priorities are with the investors they are charged to protect and not the whims of its reckless chair.”

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Court filings by crypto exchange Binance claim that Securities and Exchange Commission (SEC) chair Gary Gensler offered to serve as an “informal advisor,” and therefore should be recused in the SEC’s lawsuit.

In 2019, Gensler wasn’t yet the SEC chair but taught at MIT. According to a letter from Binance’s counsel, he sat down for lunch in March of that year with chief Changpeng Zhao (CZ) in Japan. During this meeting, the firm claims the pair discussed Binance opening an exchange in the US. The letter claims that Gensler offered to serve as an informal advisor during this meeting.

“Mr. Gensler should have been recused from any consideration in this matter based on this history and the prospect that Mr. Gensler may be a material fact witness,” Binance’s counsel wrote. “To date, the Staff has never confirmed whether Mr. Gensler has recused himself.”

The letter further claimed that Gensler gave CZ a sneak peek of his planned testimony before the House Financial Services Committee hearing in 2019, in which lawmakers discussed Facebook’s planned cryptocurrency Libra and wallet Calibra. In his statement, he urged for rules to be put in place “to guard against Calibra’s use of potential abuse of such customer funds.”

His testimony also stated that he doesn’t “advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies.”

Read more: Explained: How Binance’s stablecoin BUSD can be a security

Furthermore, an investigation by the Wall Street Journal in March of this year suggests that Binance and Gensler’s relationship wasn’t quite as Binance describes. Internal company messages from 2019 show that the crypto exchange approached Gensler — not the other way around.

One Binance employee told colleagues that Gensler would be a useful advisor because he would likely be “back in a regulators seat if Dems win the 2020 election.” The head of Binance’s venture investing arm and another employee met Gensler in October 2018 and claimed that “Gensler declined advisor-ship.”

In a statement to CNBC regarding Binance’s allegations, the SEC said, “the Chair is very familiar with and in full compliance with his ethical obligations including any recusal obligations.”

The SEC and Binance’s next court appearance is scheduled for June 13, where the judge presiding over the case will hear about the SEC’s temporary restraining order to seize Binance’s assets.

Update 2023-06-08 5:25 PM: An earlier version of this piece said that Binance’s lawyers had claimed that Gensler approached the exchange, the piece has been updated to more accurately say that Binance’s lawyers want Gensler to recuse himself due to his previous offer to be an adviser.

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Last month, memecoins saw a surge in popularity that Coinbase claimed had reached “a fever pitch not seen since the height of the bull market in 2021.” Among the biggest gainers was controversial frog-based token PEPE, which, according to Coinbase’s newsletter, became the fastest Ethereum token to reach a $1 billion market cap.

However, despite its meteoric rise, the token soon crashed by more than 50% and today boasts a market cap of just over $445 million.

But, as is common in the memecoin world, it hasn’t taken long for a new fad to fill the vacuum left by the reeling PEPE. Following the launch of the Securities and Exchange Commission’s (SEC) lawsuits against Binance and Coinbase, tokens making light of the commission and its chairman, Gary Gensler, are rallying.

Good Gensler

Good Gensler (GENSLR) has a total market capitalization of around $3.2 million and a 24-hour trading volume of $1.25 million. The coin features the outspoken SEC chairman donning laser eyes and has rallied 260% following the regulator’s recent lawsuit against Coinbase.

F*ck Gary Gensler

F*ck Gary Gensler (FKGARY) is one of the edgier Gensler memecoins. This token also rallied an obscene amount, jumping 130% in 48 hours. It currently has a 24-hour trading volume of $120,870 and a market cap of $492,140.

Stupid Egotistical C*cksuckers, SEC

This anti-SEC token launched on June 5 and within 24 hours had rallied a staggering 15,530%. 

Read more: Coinbase trader makes $25M on options bets day before SEC suit

This coin has a 24-hour trading volume of almost $3 million and a total market cap of $422,410. However, it’s since dropped by over 61% from its 0.0000001748 all-time high. 

4Token

It’s not just SEC and Gensler memecoins cashing in on the latest wave of hype. For fans of Binance, there’s 4Token. This coin is based on Binance chief Changpeng Zhao (CZ) and his like-clockwork tweeting of the number four in response to negative news. It references a ‘do’s and don’ts’ list CZ posted wherein the fourth point reads “Ignore FUD, fake news, attacks, etc.” 

The token rallied 24% on June 5, following the SEC’s allegations of misrepresented trading controls and oversight of Binance US against the exchange. The hype quickly cooled and since its peak in May, 4Token has dropped by over 84%.

These memecoins may be up at press time, but it remains to be seen how they’ll fare as Binance and Coinbase’s lawsuits unfold. Meanwhile, PEPE is clawing back — the coin is up 16% in the past 24 hours.

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The post Move over Pepe, these Gary Gensler memecoins have been pumping appeared first on Protos.

In his most straightforward warning to date, Securities and Exchange Commission (SEC) chair Gary Gensler published a video explaining how crypto exchanges have miscategorized most crypto assets as non-securities.

In addition to failing to register with the SEC, exchanges have failed to disclose risks, segregate customer assets, surveil market misconduct, nor file information necessary for reasonable investment decisions.

Within the four-minute video posted last Thursday, Gensler explained how many crypto exchanges illegally combine the functions of a clearinghouse, broker-dealer, and securities exchange. Investor protection safeguards require these functions to be handled by independent entities in order to avoid conflicts of interest and misconduct incentives.

Despite years of warnings from the SEC, which is tasked with protecting everyday investors, many digital asset exchanges have skipped disclosing information to the public. Gensler noted that failure to register with the SEC accompanies a lack of consumer protections — an unregistered crypto platform such as Celsius, Voyager, or FTX may claim its customers’ deposits are somehow its property upon declaring bankruptcy, for instance.

• Unregistered crypto platforms also publish misleading statements to potential investors and customers.
• The FDIC issued a cease-and-desist letter ordering Voyager Digital to stop falsely claiming its cash deposits were 100% insured.
• Despite its claims to the contrary, the now-defunct crypto broker didn’t safeguard almost any customer cash in FDIC-insured bank accounts.

Decentralization doesn’t make laws disappear

Gensler’s comments also apply to decentralized finance (DeFi) and some non-fungible token (NFT) marketplaces. Many decentralized exchanges (DEXs) list tokens that pass the Howey Test, making them investment contracts. The SEC has already classified dozens of digital asset offerings as securities offerings and warned that thousands of additional, unregistered crypto securities are out there.

Managed NFT collections on some NFT marketplaces might also qualify as securities. In DeFi, many platforms offer classic features of securities exchanges: yields, profit-sharing agreements, broker-dealing, or attractive interest rates on idle deposits.

Gensler’s tweet and video naturally proved unpopular on Crypto Twitter, which supports non-Bitcoin digital assets and generally dislikes the SEC. Commenters accused the SEC of failing to provide a clear path to register or using lawsuits to bankrupt digital asset startups.

Read more: Gary Gensler can’t say if ETH is a security because of the SEC

“Yet you provide no guidance on how to do that,” one user replied to Gensler’s video. “And everyone who did in good faith has been sued into business failure. You seem to spend more time on Twitter making videos these days instead of doing your job after getting demanded by congress to provide clarity and new rules that make sense for these assets, as demanded by the users of these assets,” they said (their emphasis).

Others alluded to Sam Bankman-Fried’s attempts to court regulators — including the SEC — behind the scenes before FTX’s meltdown. Others complained about the commission’s continued unwillingness to classify the industry’s second-largest coin, Ethereum, in terms of its status as a security.

SEC chair Gary Gensler ramping up crypto enforcement

Recently, the SEC has pursued major enforcement actions against digital asset firms. It filed a case alleging that Ripple and its co-founders raised $1.3 billion in an unregistered securities sale in December 2020. The case is ongoing but both Ripple and the SEC are confident that the presiding judge will make a decision soon — in their favor, of course.

Last November, the SEC extended its all-win track record against crypto in court by gaining a judgment against LBRY, a decentralized content-sharing app that conducted an unregistered securities sale.

The SEC is now threatening to sue Coinbase, the world’s second-largest crypto exchange. Coinbase issued a rebuttal to the SEC’s Wells Notice, which alleged that it operated an unregistered exchange, listed unregistered securities, and offered staking and wallet activity that may qualify as securities activities.

For its part, Coinbase accused Gensler of an “about-face” on the legality of its offerings and refusing to specify which assets are securities. It also says it had been working with the SEC to register.

Read more: Coinbase reportedly considers overseas expansion amid US crackdown

Securities firms need to fulfil investor protection obligations

Gensler believes that almost every crypto asset is an unregistered security, except for bitcoin and a short list of tokens that have received a no-action letter from the SEC, like TKJ and QUARTERS. It’s worth noting that although he’s chair, SEC determinations are made collectively — he’s just one voter among five commissioners who get a say.

In any case, crypto exchanges and digital asset investment firms that list securities must fulfil their investor protection obligations like any other firm. Many crypto assets, decentralized apps, and NFT marketplaces list securities. Worse, many exchanges illegally commingle clearinghouses, broker-dealers, and securities exchanges within one entity.

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