Gensler Says SEC and Crypto Has Benefited From Regulation by Enforcement, Plans to Continue

Key Takeaways

• Gary Gensler doubled down on the SEC’s approach to crypto.
• The SEC chief claimed their approach is based on decades of robust laws.
• TSEC has once again added crypto to its examination list. 

Securities and Exchange Commission (SEC) Chair Gary Gensler has reiterated the agency’s commitment to its regulation-by-enforcement approach to crypto, claiming it has only benefited the commission and the industry.

Gensler Defends the SEC’s Approach

In a recent interview with Bloomberg , Gensler insisted that the SEC’s enforcement efforts are grounded in decades of established laws and regulations rather than arbitrary decisions.

He emphasized that the agency’s primary focus is protecting investors and promoting capital formation.

“We have benefited from nine decades of robust laws from Congress and rules from various agencies, not just the SEC but the Commodity Futures Trading Commission, to help promote the markets, protect investors, and promote capital formation and the markets in the middle, And that’s what we’ll continue to do,” the SEC Chair expressed.

A Questionable Approach

While Gensler is adamant about the SEC’s current approach, critics argue that the agency’s reliance on outdated laws and regulations is unfit for the rapidly evolving crypto industry.

The recent ruling in the XRP case, in which a federal judge ruled that selling XRP tokens to retail customers did not violate securities laws , has highlighted the limitations of traditional regulatory frameworks, particularly the Howey Test , in understanding blockchain and cryptocurrency.

Apart from its partial defeat in the Ripple lawsuit , the SEC has encountered challenges in several other crypto-related cases over the past year.

The outcomes, or the lack thereof, suggest that the agency’s enforcement strategy may not be as consistently effective as initially projected by Gensler.

SEC Adds Crypto to Examination List

The SEC’s Division of Examinations recently released its priorities for 2025, with a notable emphasis on crypto assets and their associated products and services.

This year, the list specifically highlights spot Bitcoin and Ethereum exchange-traded products (ETPs) as areas of focus, marking a significant shift in the agency’s approach.

In 2024, the agency added crypto to its examination priority list without specifying particular projects or products. This year’s iteration provides more clarity.