On January 14, 2025, outgoing U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler gave a farewell interview on CNBC. In response to host Andrew Ross Sorkin’s questions, he maintained that "encryption is nothing but unregistered securities," a position that is entirely consistent with his regulatory style since taking office in 2021.
Despite Gensler’s earlier interest in Bitcoin, and even writing an inspiring editorial about the future of Bitcoin in 2019, as the SEC Chairman he has become the most famous opponent of encryption in SEC history.
01 Tough Regulator: Gensler’s Core Philosophy and Methods
Gary Gensler has taken an unprecedented tough regulatory stance on the cryptocurrency industry during his term. He believes that most cryptocurrencies should be regarded as securities and therefore must comply with federal securities law.
Gensler repeatedly emphasized that "cryptocurrencies are nothing more than unregistered securities," a viewpoint that has become the cornerstone of his regulatory actions during his tenure.
He did not attempt to create new regulations specifically targeting the characteristics of encryption, but rather tried to force encryption into the existing legal framework, regardless of how unsuitable these regulations were for encryption.
In Gensler’s view, there is too much fraud, money laundering, and other criminal activities in this field, and he has a responsibility to protect investors from these threats.
02 Law Enforcement and Regulation: The Tough Stance Behind the Digital
Under Gensler’s leadership, the SEC has adopted an "enforcement-oriented" strategy to establish regulatory boundaries through a large number of enforcement actions.
Since taking office in 2021, he has initiated over 2,700 law enforcement actions, with fines exceeding $21 billion.
In just the first quarter of 2025, the SEC took up to 200 enforcement actions, many of which targeted cryptocurrency operations.
Gensler also pointed out that even the relatively friendly former SEC Chairman Jay Clayton had initiated 80 lawsuits against the encryption industry during his tenure.
This enforcement-intensive strategy has created a high level of uncertainty in the industry, leading many encryption products to "close their doors" to U.S. users.
03 Bitcoin Exception: Gensler’s Position on Specific Assets
Although most cryptocurrencies are viewed as securities, Gensler has taken a different stance on Bitcoin. He has publicly stated that Bitcoin is currently not considered a security.
In a farewell interview, he compared Bitcoin to gold, pointing out that it is a "highly volatile speculative asset," but people are eager to trade it.
However, Gensler stated that he cannot predict the future of Bitcoin and does not know whether it will have any value in 10 or 20 years.
Host Sorkin pointed out that Gensler’s struggle with Bitcoin is futile, as Bitcoin will be more popular than ever by the end of Gensler’s tenure.
04 Persistence After Resignation: Gensler’s Unchanging Attitude
On January 20, 2025, Gary Gensler officially stepped down from his position as SEC Chairman. However, after his departure, he has rarely spoken publicly, and in a recent interview with CNBC, he still insisted on his tough enforcement stance on the encryption field during his tenure.
He continues to emphasize that cryptocurrency is a "highly speculative, extremely risky asset," and firmly defends his regulatory decisions regarding digital assets during his tenure.
Gensler also cited major fraud cases such as Sam Bankman-Fried to demonstrate the necessity and legitimacy of strict regulation.
Despite the widespread criticism of Gensler’s "enforcement regulation" model in the encryption industry, and even though some cases have been terminated by the new SEC, he still insists that the policies during his tenure are correct and necessary.
05 New Era of Regulation: The Rapid Shift in SEC Policies Post-Gensler
In stark contrast to Gensler, the SEC is quickly reversing the regulatory path of the Gensler era under the new leadership appointed by Trump.
SEC Acting Chair Mark Uyeda has canceled multiple lawsuits and investigations against cryptocurrency companies, some of which were also withdrawn under the direction of the new administration.
SEC’s newly appointed chairman Paul Atkins previously stated that the vast majority of tokens do not qualify as securities and has promoted a simplified listing process for cryptocurrency ETFs, significantly easing the compliance burden on the industry.
In June 2025, the SEC officially withdrew several proposed rules aimed at restricting cryptocurrency activities that were put forward during the Gensler era.
These proposals include revisions to the definition of exchanges—attempting to bring decentralized finance platforms under the regulation of national securities exchanges, as well as proposals to expand the current custody rules.
06 New Market Environment: The Status of the Encryption Market After Gensler’s Departure
In the changing regulatory environment following Gensler’s departure, the encryption market has shown new vitality. According to the latest data from Gate Research Institute on October 22, the current price of BTC is 108,386 USDT, down 0.88% in the last 24 hours, and ETH is reported at 3,871 USDT, down 1.63%.
At the same time, AI concept tokens are gaining strength against the trend, with BLUAI soaring by 295.40%, COAI rising by 39.45%, and LIGHT increasing by 26.72%.
Market structure is also stabilizing, with Bitcoin open interest decreasing by 30% over the week, and the clearing of leverage has alleviated risks.
Gate Perp DEX cumulative trading volume exceeds 1 billion USD, becoming a highlight in the growth of decentralized derivatives.
These changes occurred against the backdrop of the SEC’s regulatory policy shifting from confrontation to cooperation, with new chairman Paul Atkins launching "Project Crypto" as a statement of governance, also seen as a major correction of past regulatory approaches.
07 Innovation Exemption: The Emergence of the SEC’s New Regulatory Framework
Unlike Gensler’s tough enforcement, the new SEC leadership has proposed an "innovation exemption," which is a targeted and conditional exemption framework.
This framework allows encryption institutions to avoid facing overly burdensome or incompatible mandatory regulatory requirements when providing new products and services.
The new framework recognizes that the securities rules adopted by traditional markets are not applicable to the rapidly evolving encryption market, and thus shifts towards a more comprehensive and risk-based regulatory approach.
The SEC emphasizes that a key qualification standard for platforms to obtain an "innovation exemption" is the necessity to demonstrate "true decentralization" to prevent regulatory arbitrage by centralized entities.
This new approach is expected to promote the vigorous development of three key areas: DeFi platforms, "super applications" entities, and the tokenized securities ecosystem.
Future Outlook
Gary Gensler’s regulatory legacy is as contradictory as the encryption market itself. He wrote an inspiring op-ed about the future of Bitcoin in 2019, but as the chairman of the SEC, he became one of the most notable opponents of the encryption industry. Now, after his departure, he still insists that his stance is correct, while the SEC has quickly reversed his regulatory path under new leadership.
How will history judge Gensler’s tenure? The answer may lie somewhere in between—his tough stance has pushed the industry to place more emphasis on compliance, but it has also stifled innovation. As the SEC shifts under new leadership towards an "innovation exemption" framework, the Gensler era of encryption regulation has come to an end, but the debate he sparked about the balance between regulation and innovation will continue to influence the future trajectory of the encryption world.
