The current SEC Chairman is nothing if not a man of his word. From the very beginning, Gary Gensler has been unwavering in his commitment to tough crypto regulations. Despite facing fierce criticism from the entire industry (and even a few side-eyes from his own colleagues), he’s stayed the course, even with the looming exit threat.

During his speech at the Practicing Law Institute’s 56th Annual Institute on Securities Regulation on November 14th, Gensler dialed up his anti-crypto rhetoric yet again, passionately defending his strict regulatory stance toward the industry.

This is an area where investors have suffered significant harm over the years. Beyond speculative investments and potential misuse for illicit activities, the vast majority of crypto assets have yet to prove sustainable use cases. Everything we’ve done has been centered on enforcing the laws we have. 

Gary has certainly done everything and more to oversee compliance. He may have worked late, missed his kids’ baseball games, and even worked on weekends. But his efforts haven't exactly been met with applause. Instead, the industry hit back with lawsuits against the SEC and its leader. Eighteen U.S. states have accused the financial regulator of "gross government overreach" in dealing with the emerging crypto sector.

Another Wave Threatens SEC’s Anti-Crypto Agenda

The latest lawsuit isn't exactly a first in the SEC’s practice. Back on April 25, 2024, software developer ConsenSys filed a case against the SEC and its five commissioners over allegations that the agency was planning to regulate ETH as a security. ConsenSys argued that the SEC was essentially running a campaign to “seize control of crypto’s future” by trying to force Ether into the securities category.

However, in a September 19 ruling, Texas federal judge Reed O’Connor dismissed ConsenSys’s claims against the SEC’s ETH investigation as unsubstantiated. 

For years, industry leaders have criticized the SEC’s lack of clear, consistent policies around digital assets, seeing this ambiguity as the biggest hurdle for developers in the U.S. According to reports, various SEC lawsuits since 2021 have cost crypto firms $426 million in legal fees. 

But now, change might be on the horizon come January 2025, when Trump takes office. His transition team is reportedly considering three pro-crypto candidates to replace Gensler. With these developments, others in the industry who’ve felt the SEC’s sting are growing bolder, hoping for justice under the new regime.

The latest accusations of "gross government overreach" come from eighteen states, including Nebraska, Tennessee, Wyoming, and Kentucky. The lawsuit clearly states:

The Securities and Exchange Commission (SEC) disregards this allocation of authority. Instead, without Congressional approval, the SEC is unilaterally attempting to strip states of their regulatory powers through a series of ongoing enforcement actions.

According to ConsenSys CEO Joe Lubin, these legal battles between crypto firms and the SEC might just evaporate once Trump is in the driver’s seat. Lubin believes that their lawsuit, which we mentioned earlier, was the spark that ignited a broader pushback.

If these upcoming changes come to pass, it would be a significant victory for the crypto industry, which has seen the SEC locked in protracted legal disputes with major exchanges like Binance and Coinbase, not to mention the never-ending saga with Ripple since December 2020.

In an interview at Devcon 2024 in Thailand, Lubin said:

I think Trump's transition team is already moving aggressively. Maybe not all the cases, maybe not every issue, but I’ve got a feeling that our industry could save hundreds of millions in legal costs moving forward.
Gensler’s Potential Departure Promises a Bright Future for Crypto | HODL FM
Gary Gensler to step down as SEC Chair in early 2025. Crypto policy shift expected with new administration.
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