A US congressman lashes out against Gary Gensler and the SEC.

The US Congressman Warren Davidson has stated that 2024 would be a great time to fire Gary Gensler and hold the SEC accountable for his corruption.

Gary Gensler and the SEC: the administrative court scandal

Davidson specifically refers to the so-called administrative court scandal.

In 2022, the Supreme Court of the United States had opened the door to broader judicial oversight of internal courts within government agencies, but the SEC later dismissed dozens of those cases, including the one that led to the Supreme Court’s ruling.

These are a total of 42 cases archived due to “lack of controls”. 

In an official statement in June, the agency explained the incident as a communication problem and, above all, an error in sharing documents and information with external parties.

Therefore, the problem has been acknowledged, although some have interpreted it only as the tip of an iceberg. 

The dismissal of Gary Gensler from the SEC

However, Davidson is not the only one calling for the dismissal of Gary Gensler from the presidency of the SEC.

In particular, during the year, many operators and supporters of the crypto sector have requested his dismissal, due to the anti-crypto approach imposed by Gensler on the agency itself. 

In particular, the SEC sued Ripple claiming that XRP was a security. The court ruled against the SEC, establishing that XRP cannot be considered a security when traded on the secondary market (crypto exchanges), even though Ripple has not yet responded to the accusations.

The SEC then lost a second crypto lawsuit, filed by Grayscale against the agency’s decision not to approve the conversion of the Grayscale Bitcoin Trust into an ETF.

This ruling has effectively forced the SEC to change its mind regarding the approval of Bitcoin spot ETFs, making Gensler’s mistake clear.

After years of such behavior, many are now dissatisfied with the work of Gensler and the SEC under his direction. 

Who is Gary Gensler?

Gensler is not a politician, but a technician in the democratic field.

In fact, he has only held political roles during democratic administrations. 

In 2009 Barack Obama appointed him as chairman of the CTFC, and in 2021 Joe Biden appointed him as chairman of the SEC. 

The Democrats are currently mostly opposed to cryptocurrencies, and Gensler is no exception. 

However, in 2018, Gensler explicitly argued that cryptocurrencies like Bitcoin and Ethereum were not securities.

Still in 2018, when he was teaching at MIT, he held a course entitled “Blockchain & Money”. 

The U-turn of 2023, which has already begun in 2022, could be a mere political choice to profess and emphasize one’s adherence to the democratic faction, given that next year the elections will be held. 

2024: the year of change

2024 could be a turning point year, although it is much more likely to be 2025. 

In fact, next year’s elections could be won by the Republicans, who are currently clearly ahead in the polls, and the new president will take office in January 2025. 

If indeed the new president of the USA will be a Republican, it is very likely that Gensler will be replaced. In fact, it is customary for the heads of the main government agencies to be filled by people trusted by the president, and a Republican president almost certainly will not want to have a Democrat at the helm of the SEC. 

However, for months now, there has been speculation that even Congress, that is, the US Parliament, could move to try to dismiss Gensler as early as 2024. 

In addition, if after the approval of Bitcoin spot ETFs by the SEC they were to be successful without causing any issues, as it seems likely to happen, Gensler should be accused of unjustly delaying their approval for years, since the first requests in this regard date back a few years ago. 

A defeat of the Gensler line across the board could easily generate a collapse in popularity and consensus for the current president of the SEC, even among Democrats who still support him. 

Cryptocurrencies and politics in the USA

It’s no wonder that in such a consensus, crypto markets have already become part of the electoral propaganda for next year’s elections. 

What is still unclear, however, is how effective it can be for the Democrats to lash out. 

In fact, it was the Democratic politicians who received the most donations from Sam Bankman-Fried, the founder of the crypto exchange FTX and the main person responsible for its failure. 

However, it is likely that the failure of FTX itself has led some democratic politicians to want to distance themselves from the crypto world, precisely to try to make people forget about the flood of donations received from SBF. 

At this point, once the FTX issue is forgotten or diminished, it may no longer be necessary for Democrats to distance themselves so much from the crypto world, also because there is a risk that such an approach may ultimately be unfavorable in terms of elections. 

The elections will be in November, so there are still several months during which the Democrats’ anti-crypto approach could fade. Gensler’s dismissal could be a turning point in this regard.