Was FTX Gary Gensler's Fault? Unclear Laws Created a 'Haven for Bad Actors', Says Hester Peirce

SEC’s Crypto Task Force Blames Former Chair for Industry Fraud

Less than a day after the SEC dismissed its lawsuit against Coinbase, the head of the agency’s new crypto task force criticized the policies of former chair Gary Gensler for enabling fraud in the crypto industry.

In a statement on Friday, SEC Commissioner Hester Peirce argued that the SEC’s focus on enforcement without clear guidance led to increased fraud and harm to the industry. Peirce stated that the decision to prioritize enforcement initiatives under the previous administration inadvertently facilitated bad actors and made it difficult for legitimate businesses to operate.

Peirce cited high-profile scandals like the $32 billion collapse of FTX as potential consequences of Gensler’s aggressive anti-crypto policies. “The American public suffered because environments in which the law is unclear are havens for bad actors,” she said.

Recently, Peirce and her colleagues have been reversing many of Gensler’s actions, dismissing lawsuits against various companies, including Robinhood and Uniswap Labs. Following the SEC’s dismissal of its suit against Coinbase, the agency indicated a shift towards a fresh approach regarding how crypto companies comply with federal regulations.

Peirce emphasized that while the SEC is reevaluating its stance to benefit the crypto industry, it will continue to enforce regulations where necessary, stating, “It does not signal an end to the Commission’s use of its enforcement tool in appropriate cases.”