Key Highlights:
- Gensler says most tokens lack fundamentals, except Bitcoin.
- Former SEC chair stresses investor protection over innovation.
- Gensler also defends 100+ crypto cases, and cites frauds like FTX collapse.
Former U.S. SEC Chairman Gary Gensler, in a CNBC interview was seen defending his strict approach towards the cryptocurrency industry. In the interview, Gensler stated that he has “no regrets” about how he handled crypto regulations, even though it was one of the most chaotic times for the industry.
Reflecting on His Tenure
Gensler, who led the SEC during crypto’s boom-and-bust cycle, pointed out that the SEC brought nearly 100 cases that were related to digital assets. He said this matched the records of his predecessor, Jay Clayton, but it felt more significant because of the moment.
Between 2020 and 2024, major frauds shook the industry entirely, for example, Sam Bankman-Fried’s FTX came out to be the era’s biggest scandal. For Gensler, this highlighted deeper structural flaws in the market and he further proved that the industry needed a strict oversight.
“Frauds and hype cycles dominated the industry,” Gensler said, describing crypto as an asset class mostly sustained by speculation rather than by real innovation or value creation.
Buffet Comparisons and Fundamental Skepticism
One of Gensler’s most telling remarks was his agreement with traditional investing views, which were echoing Warren Buffet’s doubts about assets lacking real fundamentals.
“The public is interested, but for investors, most of these tokens aren’t tied to fundamentals. Like Buffet would say, what are the goods? What are the revenues?” Gensler remarked.
He then further added that, except for Bitcoin, almost all tokens that are in circulation currently lack business models, cash flows, or intrinsic value to justify their market prices. He portrayed the token economy as a sphere leaning on momentum trades, that is driven by hype rather than productivity.
This approach has surely gained criticism from the industry and the crypto community. Luke Martin, a well known crypto analyst, trader and influencer posted on X (formerly known as Twitter) and stated that Gensler usually evaluated crypto assets as if he were a personal financial advisor rather than a regulator mandated to provide neutral policy oversight. By imposing his own valuation framework onto the market, Gensler restricted innovation under the name of investor protection.
The Bitcoin Exception
Gensler kept his consistent view that Bitcoin is different from other tokens. In the interview, he called Bitcoin “exceptional,” pointing to its strong decentralized and broad adoption. He sees Bitcoin as having the trust and stability that most other blockchain tokens still lack.
This view is in connection with his earlier work as an MIT lecturer, where he highlighted Bitcoin’s digital scarcity and its role as a speculative store of value. Yet, his refusal to give the same acknowledgement to Ethereum or other large networks became one of the most debated issues of his time leading the SEC.
Investor Protection Above All
Despite the criticism, Gensler has stressed that protecting investors was always his main priority as a Chairman of the agency. Some saw his stance as overly cautious and as something that was limiting innovation within the industry. Gensler has also argued that the industry’s bankruptcies, failed projects, and scams justified these measures.
“Sam Bankman-Fried was just one case,” Gensler explained, pointing out that the wider crypto market gave room for the bad actors to attack. “Our job was to safeguard investors, and I stand by the approach we took.”
Under his leadership, the SEC became known for tough enforcement that hindered innovation. Lawsuits against major firms and token issuers was the highlight of his tenure, leaving a divided legacy. Many in crypto felt his leadership showed progress by avoiding clear rules. Others believed it kept speculation from spiralling further.
The Unresolved Debate
After Gary Gensler stepped down as the Chair of the SEC, his views still manage to give rise to fresh debate on the SEC’s role in crypto. Some of the community members still believe that his strict rules stopped fraud and the others still think that those same rules hindered innovation. In his eyes, he sees himself as a protector, much like Buffet, focusing on real value even as crypto runs on networks. In the end, his legacy is firm: he shaped crypto regulation and treated Bitcoin as the only coin that mattered.
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