Gary Gensler Defends SEC’s Crypto Crackdown Amid SBF Questions

• Gary Gensler defends SEC’s 100 crypto lawsuits, calling most tokens speculative and risky.
• Criticism grows over Gensler’s private meetings with FTX founder Sam Bankman-Fried.
• New SEC Chair Paul Atkins shifts from lawsuits to clearer crypto regulatory guidelines.

Gary Gensler, former Chairman of the U.S. Securities and Exchange Commission (SEC), told CNBC that he does not regret the regulatory actions taken against cryptocurrency firms during his leadership. He said the measures, which included nearly 100 lawsuits, were necessary to protect investors in what he described as a market rife with fraud.

He argued that most cryptocurrencies function on momentum and hype rather than fundamental value creation. Gensler identified Bitcoin as the only digital asset with staying power, describing the rest of the market as speculative and risky. He stressed that his tenure focused on ensuring investor protection at a time when misconduct was prevalent across the industry.

Allegations Tied to Sam Bankman-Fried

Criticism has followed Gary Gensler over alleged private meetings with Sam Bankman-Fried, founder of the collapsed exchange FTX. Attorney John E. Deaton questioned on social media why interviewers avoid pressing Gensler about these meetings. According to Deaton, Gensler met Bankman-Fried privately on at least two occasions, raising concerns about regulatory access.

Testimony in court revealed that Bankman-Fried contributed $10 million to the Biden Administration and donated a total of $72 million to Democratic campaigns. Deaton pointed to rumors that a short-form registration was being considered, potentially favoring Bankman-Fried’s exchange. He argued that these ties deserved greater scrutiny in media interviews with Gensler.

Gary Gensler Policy Contrast With Current SEC Chair

As highlighted in our previous post, Gensler’s approach was marked by lawsuits against leading firms, including Coinbase, Kraken, and Ripple Labs. His departure in January closed a period defined by stringent regulation. The strategy drew criticism from prominent figures such as Mark Cuban and Anthony Scaramucci, who argued that the lack of clear rules discouraged innovation.

By contrast, current SEC Chair Paul Atkins has shifted toward collaboration with the industry. Under his leadership, the SEC introduced “Project Crypto” to adapt regulatory frameworks to blockchain-based financial systems. In addition, lawsuits against Coinbase and Kraken have been withdrawn, signaling a departure from the enforcement-heavy policies associated with Gensler.

Academic Return and Ongoing Warnings

After leaving office, Gary Gensler resumed his role as a professor at the Massachusetts Institute of Technology (MIT). In April, he repeated his view that Bitcoin may survive long-term while most other cryptocurrencies will likely disappear.

His continued doubt points to the divide between past and current SEC leadership. While Atkins pursues regulatory clarity and cooperation with the Commodity Futures Trading Commission, Gensler maintains that strict oversight was essential to protect investors from what he calls a risky asset class.