SEC and Who is Gary Gensler?

12 Nov 2023 by Harry Newman 4 min read

The U.S. Securities and Exchange Commission or SEC stands as a safeguarding commission for financial integrity, making sure investors have protection.

Gary Gensler is at the helm of the SEC, a job he has held since 2021.

What is the SEC and Who is Gary Gensler

The SEC has been around a long time, long before Gary Gensler.

The SEC was created in 1934 by Congress, as an independent federal government regulatory agency responsible for protecting investors.

Founded from the Securities and Exchange Act of 1934.

The role of the SEC is to promote full public disclosure, protect investors against fraudulent and manipulative practices in the market, and monitor corporate takeover actions in the USA.

The SEC is headed by Gary Gensler who took office in 2021, there is also a five-member commission. Commissioners are appointed by the President and confirmed by the Senate. The President designates one of the Commissioners as the Chair.

The SEC's mission and values are to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.

The promotion of capital markets inspires public confidence and provides a diverse amount of financial opportunities to retail and institutional investors, entrepreneurs, public companies and other market participants.

The SEC consists of five divisions:

Division of Corporate Finance: ensures investors are provided with material information about companies to make informed investment decisions.

Division of Enforcement: is in charge of enforcing SEC regulations by investigating cases or prosecuting civil suits.

Division of Investment Management: regulates investment companies.

Division of Economic and Risk Analysis: integrates data analytics of economics into the core mission of the SEC.

Division of Trading and Markets: which maintains standards for fair, orderly and efficient markets.

Gary Gensler is the chair of the SEC, his time as chair has been eventful, to say the least.

Gary has likened the cryptocurrency market to the “Wild West”.

Before Gary Gensler became chair of the SEC he taught lessons on blockchain technology and digital currencies at MIT, as a professor of the Practice of Global Economics and Management.

Significance of SEC and Gary Gensler

If you are involved with cryptocurrencies you will have heard of Gary Gensler, the man at the forefront of providing a regulatory framework for cryptocurrencies.

SEC plays a big role in affecting cryptocurrencies all over the world, the SEC can only bring civil actions. Criminal cases fall under the jurisdictions of other law enforcement agencies.

Both the SEC and these other law enforcement agencies work closely together providing evidence and assisting with court proceedings.

The SEC doesn't always get things right either, that is shown by the well-known recent ongoing court case between the SEC and XRP.

This has been going on for many years now with no end in sight, however, recently XRP has had some favourable rulings.

The SEC has been finding it difficult to hire new employees as they have a strict policy where no one can own cryptocurrencies as a conflict of interest.

Gary Gensler claims that Bitcoin is a commodity and every other cryptocurrency is a security.

This has caused a constant back and forth with the SEC and other cryptocurrency projects, with the SEC throwing out charges like it's fun.

The significance of the SEC ruling on cryptocurrencies has a knock-on effect around the world.

The regulatory landscape surrounding cryptocurrencies has emerged as a focal point during Gary Gensler's leadership at the SEC.

The classification of cryptocurrencies as securities, commodities or a distinct asset class is still yet to be decided, a balance between innovation and safeguarding against potential risks associated with unregulated markets still needs to be found.