SEC’s tough stance on crypto continues: Gary Gensler slams ‘FIT 21’ Act

• Gary Gensler has opposed the “FIT 21” Act, citing regulatory gaps and risks to investors.
• SEC’s crypto stance before the 2024 elections could majorly sway voter sentiment.

As former President Donald Trump starts accepting crypto donations for his 2024 presidential campaign, the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has voiced his opposition against the crypto market bill.

Gensler’s sudden move 

In a statement released on the 22nd of May, Chair Gary Gensler publicly voiced his opposition to the Financial Innovation and Technology for the 21st Century Act (“FIT 21” Act).

The FIT 21 Act is a U.S. legislation aimed at promoting the development of new financial instruments and technologies while establishing a framework for their regulation and oversight.

Gensler stated,

“Financial Innovation and Technology for the 21st Century Act (“FIT 21”) would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”

He further added,

“The bill allows issuers of crypto investment contracts to self-certify that their products are a ‘decentralized’ system and then be deemed a special class of ‘digital commodities’ and thus not subject to SEC oversight.”

Such a strong stance by the SEC Chair ahead of the 2024 presidential election has sent shockwaves throughout the crypto community.

Crypto enthusiasts unhappy 

Underlining the unprecedented involvement of the SEC in presidential politics, journalist Chris Brummer took to X (formerly Twitter) and noted,

Source: Chris Brummer

Echoing a similar line of thought, Ripple’s CLO, Stuart Alderoty, said,

“Gensler overplayed his hand. He thought crypto was an easy target. He relished being the guy that everyone loved to hate.”

He further went on and opined,

“He thought he was above Congressional oversight. That’s all gone. He’s now a struggling political liability.”

In a separate earlier interview, SEC Chair Gary Gensler voiced his frustration over the “outsized ratio” of crypto-related inquiries compared to those about traditional finance.

“Crypto is a small piece of our overall markets. But, it’s an outsized piece of the scams and frauds and problems in the markets.”

Impact on the upcoming elections 

These developments might have a significant impact on President Joe Biden’s position in the upcoming election.

His administration’s cautious stance on cryptocurrency, as reflected in Chair Gensler’s regulatory approach, contrasts sharply with Donald Trump’s pro-crypto moves.

Hence, the difference in their approaches may sway voters, especially those supportive of cryptocurrencies.