US SEC chief Gary Gensler to step down on January 20
Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), is stepping down after years of spearheading initiatives to regulate the cryptocurrency sector.
The agency said in a statement Thursday that Gensler will be leaving on January 20, 2025. A "honor of a lifetime" to collaborate with his fellow SEC employees, according to Gensler.
On January 20, 2025 I will be stepping down as @SECGov Chair.
— Gary Gensler (@GaryGensler) November 21, 2024
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Gary Gensler to step down
Gensler said in the statement, “I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favor. I’ve greatly enjoyed working with my fellow Commissioners, Allison Herren Lee, Elad Roisman, Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga."
"I also thank Congress, my colleagues across the U.S. government, and fellow regulators around the world.”
Gensler enforcement actions and initiatives
In his tenure at the SEC, which began in April 2021, Gensler initiated initiatives to protect investors in cryptocurrency markets, instituted changes on executive compensation based on performance, and pushed for central clearing in Treasury markets. After enforcement actions against major industry players like Coinbase, Binance, and Kraken, Gensler became a designated villain for some in the crypto space.
Gensler has urged cryptocurrency companies to register with the SEC, arguing that the majority of cryptocurrencies are securities. Because the regulations were created for more traditional organizations that are not the same as the digital asset industry, some members of the crypto industry have retaliated by claiming that it is impossible to register with the agency.
President-elect Donald Trump pledged to fire Gensler if elected
Following the chairman's legal action against cryptocurrency firms, which caused controversy in some quarters, Donald Trump, the president-elect, announced plans to fire Mr. Gensler on "day one" of his new administration, which begins on January 20, 2025.
Although Mr. Gensler's term as SEC chair, which he was appointed to in 2021, is officially set to expire in 2026, agency leaders typically leave their posts when a new administration takes office. Tension has arisen between Mr. Gensler and the president-elect because of their divergent opinions on cryptocurrencies.
XRP soars high following SEC Gensler departure announcement
The prolonged rally spurred by cryptocurrency advocate Donald Trump's re-election as U.S. president has helped XRP and the majority of other cryptocurrencies in the market. Amid the prolonged cryptocurrency market rally and the news of U.S. Securities and Exchange Commission Chair Gary Gensler's resignation, Ripple's (XRP) token soared to its highest price level since May 2021.
The news that SEC Chair Gary Gensler is leaving the agency on Thursday seems to have contributed to XRP's superior performance compared to other significant cryptocurrencies.
According to the CoinMarketCap page, the price of Ripple's native currency XRP increased by 27.92% in the past 24 hours on Friday, reaching $1.45 as of the time of writing.
Ripple versus the SEC longstanding lawsuit
The SEC and Ripple have been engaged in a protracted legal dispute since 2020, when the agency claimed that Ripple had raised $1.3 billion by selling XRP, which it considered to be an unregistered security.
Given that XRP was the third-most popular cryptocurrency by market capitalization during the late 2017 and early 2018 crypto boom, the 2020 lawsuit was surprising to many.
The Howey test states that an asset is a security under US law if it entails a financial investment in a joint venture with the hope of making money largely through the effort of others. The SEC contended that XRP ought to have been registered as a security since Ripple's active promotion of the token's value and control over its supply satisfied these requirements. According to the SEC, Ripple should have been sued for selling XRP as an unregistered security.
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