This scenario could lead to the resignation of Gary Gensler: Former SEC official

The US securities regulator could completely change its approach to enforcing crypto, depending on a major election in the US in 2024, according to former SEC official John Reed Stark.

On August 13th tweetThe former SEC law enforcement chief speculated that the Republican president could dramatically change the direction of crypto regulation, including the potential resignation of SEC chairman Gary Gensler.

There are a number of Republican candidates currently in the running. Former President Donald Trump remains The most popular candidate among Republican voters, he was followed in a distant second by Florida Governor Ron DeSantis and then South Carolina Senator Tim Scott.

If a Republican is elected president, according to Stark, Gensler will likely be replaced by crypto-friendly Hester Peirce — often referred to as “Crypto Mom.”

Pointing to Pierce’s history of opposing and opposing many of the regulator’s crypto-related enforcements, Stark explained that if Pierce were to become SEC Chairman:

“The world should expect that most of the crypto enforcement associated with the United States of America and most of the crypto-related disruptions in the SEC will come to a screeching halt.”

Stark also drew attention to the growing polarization of crypto regulation within the SEC and US politics more broadly.

When Stark first began writing about cryptocurrency in 2017, he said a diverse range of politicians held a similar view, with then-President Donald Trump, Secretary Hillary Clinton and Congresswoman Maxine Waters agreeing that cryptocurrency is a “dangerous and horrible plague.”

Now, encryption has become a more divisive issue. Republican candidate Ron DeSantis said he intends to “protect” Bitcoin (BTC) and vowed to ban central bank digital currencies (CBDCs) if elected president.

On the other side of the fence, Democratic Senator Elizabeth Warren has made a number of concerted efforts to crack down on all forms of cryptocurrency in the country, going so far as to form an “anti-crypto army” as part of her Senate re-election. campaign.

Until this time a Republican is sitting in the Oval Office, Stark said it’s unlikely the regulator will become friendlier to cryptocurrencies, and he predicted the SEC would reject the current scope of bitcoin ETFs for a range of compelling reasons.

Quoted from SEC Commentary Aug. 8 letterStark shared that Bitcoin spot markets have a history of artificially inflated trading volumes, are highly concentrated in the hands of a few actors and depend on a hand-picked small group of entities to maintain the Bitcoin network. This is said to leave investors “extremely vulnerable” to manipulation by bad parties.

Letter from Better Markets to the Securities and Exchange Commission (SEC), recommending that spot Bitcoin ETF products be rejected. Source: Better Markets

Although there are a number of industry heavyweights from the traditional finance world, such as BlackRock and Fidelity, to file applications for a Bitcoin ETF product, Stark believes the SEC will eventually reject all pending deposits.

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