Touting historically low approval ratings rivaling that of paper cuts and hay fever, one might think Joe Biden and his handlers cared enough about voter sentiment to address the more problematic areas of his administration serving to inflame his unpopularity.
An obvious place to start would be to cut bait with the capricious, reckless, and rogue Chairman at the Securities and Exchange Commission (SEC), Gary Gensler. That Biden has yet to remove the haughty Gensler is an affirmation of all that is wrong with his presidency and the SEC itself, whose continued bungling has drawn the ire of millions of American investors.
After 10 years of denials, last month the SEC approved a number of spot Bitcoin exchange-traded funds (ETFs), even as Gensler himself continued to denounce them. While the occasion represents a watershed moment for digital assets in the U.S., the approval was given grudgingly by a Commission boxed into a legal corner.
As blockchain trends heavily in global markets, Gensler and his fellow Democratic commissioners are bound and determined to keep America in a crypto Ice Age, having time and again vented their bias against blockchain technology. Thankfully the courts continue to rebuke the SEC's illegal claims of power aimed at regulating nearly all crypto as a security.
A string of legal losses for the SEC has increased concern among investors, innovators, and others in the market that they will at some point face the Commission’s wrath. Last summer, the SEC was dealt a major blow in its case against Ripple Labs when federal Judge Analisa Torres ruled that XRP, a token used in Ripple’s payments products software, is not a security when sold on public exchanges. The ruling confirmed that the SEC’s power crusade against crypto is not grounded in law.
Evidencing SEC’s extreme regulatory overreach, the agency sought $44 million in damages from a small, decentralized content sharing company, LBRY, for the alleged offering and sale of unregistered crypto assets. Years later, with millions in legal fees and a court order, the SEC pared the penalty down to $111,614—but the damage to LBRY was done. It went bankrupt and surrendered its appeals, leading dissenting Commissioner Hester Peirce to publish a scathing statement.
“Are investors and the market really better off now after the Commission’s litigation contributed to the demise of a company that had built a functioning blockchain with a real-world application running on top of it?” she wrote. “This case illustrates the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto.”
Curiously, while Gensler’s SEC has been busy harassing smaller companies, the now defunct behemoth FTX’s massive fraud went unnoticed. Worse, Gensler flaunted the absence of transparency and accountability surrounding his meetings with FTX’s Sam Bankman-Fried to the point of being threatened with a subpoena by the Chairman of the House Financial Services Committee. Destroying honest start-ups while protecting criminals like Bankman-Fried is yet another staggering act of hubris to which Gensler refuses to answer.
An adversarial policy grounded in legally specious reasoning ultimately forced Gensler to approve the Bitcoin ETFs. At the end of August, the U.S. Court of Appeals for the D.C. Circuit held that the SEC acted “arbitrarily and capriciously” when it rejected Grayscale’s proposed Bitcoin ETF while approving two BTC futures ETFs. This public and decisive admonition of the SEC’s hypocrisy paved the way to where we are today.
Smiling through the pain, Gensler released a defiant statement on the approved ETFs that had a clear message: he will not follow the law unless forced to do so. Gensler, along with dissenting Commissioner Caroline Crenshaw, effectively declared that “arbitrary and capricious” will continue to be their crypto policy. Crenshaw’s anti-crypto dissent -- without a hint of self-awareness -- bemoans the lack of oversight to protect investors as the SEC itself corners the market on filing ruinous investor lawsuits.
Highlighting the disarray at the agency, the SEC’s Twitter (X) account was “hacked” and posted a fake approval announcement the day before the ETFs were actually greenlit. This goof caused roughly $90 million in liquidations and revealed that the SEC violated its own guidance requiring markets to protect accounts with two-factor authentication.
Abusing power while bulldozing innovation and U.S. industry, Gensler’s SEC is a microcosm of Biden’s economic wreckage that claims regulatory power beyond its legal authority to burden and harass nearly every sector of our economy. Millions of investors that are eyeing crypto as a growth opportunity are praying for a quick end to the SEC's vagaries and regulatory hostility. That Gensler still has a job with a tenure defined primarily by malice, arrogance, and incompetence spotlights Biden’s complete indifference toward U.S. investors, and likewise, a majority of voters' indifference toward him.
