U.S. Securities and Exchange Commission Chair Gary Gensler's Impact on the Crypto Industry

U.S. Securities and Exchange Commission Chair Gary Gensler's reign over the crypto industry may have prompted the creation of Ripple-backed super political action committee Fairshake.

During a "60 Minutes" segment on CBS aired Sunday, Ripple CEO Brad Garlinghouse stated that companies united in response to a "war on crypto." The SEC's stance towards cryptocurrencies was cited as the primary reason Ripple and other firms established Fairshake, as noted by 60 Minutes.

"I'm not sure Fairshake would exist," Garlinghouse remarked, attributing the committee's formation to the SEC's aggressive approach.

Fairshake has raised over $200 million in this election cycle, receiving contributions from major crypto companies and investment firms, including Coinbase and a16z. The super PAC claims it "supports candidates solely through its independent activities" and advocates for candidates committed to making the U.S. a hub for innovation.

Fairshake's contributions have influenced several down-ticket elections, including the Ohio Senate race in November. The PAC donated $12 million to Republican crypto-friendly candidate Bernie Moreno, who later achieved victory against Democrat Sen. Sherrod Brown, a known critic of the crypto industry.

Gensler's Departure

Gensler announced that he will step down on January 20, 2025, coinciding with President-elect Donald Trump's inauguration. Throughout his tenure, Gensler asserted that most cryptocurrencies qualify as securities and has urged crypto firms to register with the SEC. However, some industry leaders contend that registration is unattainable, as existing rules primarily cater to traditional entities rather than the digital asset sector.

Ripple has been engaged in a prolonged legal battle against the SEC since 2020, when the agency accused the firm of raising $1.3 billion via the sale of XRP, deeming it an unregistered security.

Recently, Trump appointed crypto-friendly Paul Atkins to lead the SEC beginning in 2025.

On December 6, Gensler reiterated his stance on crypto, expressing concerns that non-compliance with SEC regulations could harm investors. "… with regard to the crypto markets, without compliance with our time-tested rules related to disclosures, conflicts, and business conduct, investors will get harmed… Such non-compliance not only can undermine trust that investors, issuers, and market participants have in our financial system, but also risks being imported to the rest of the financial system," Gensler stated.

Former SEC enforcement lead John Reed Stark, also featured on "60 Minutes," advised the agency to reassess its approach towards crypto, declaring, "As far as these election results are concerned, the clear mandate is the SEC needs to lay off crypto. And that's exactly what's gonna happen."