A VERY unpopular opinion - but please hear me out.
SEC Chair Gary Gensler is arguably cryptocurrency's most hated villain in recent years. His ruthless stance since the FTX collapse is harming the industry and if he is successful, one can argue that he may even be setting back the industry by a number of years. The aim of this article is not to defend Gary Gensler at all ( because I personally can't stand the sight of him either) but rather an opportunity to understand how he may indirectly be the villain that this industry needed. Let's dig a bit deeper in this hypothesis.
1. Gary Gensler - The irrational U-Turn
If you're reading this article I'm sure that you are aware of how Gensler was pro-crypto ( or at least pro "certain" crypto) at his time as a lecturer teaching Blockchain & Money. He has been seen as a possible saviour for crypto mainly because he has stated on multiple occasions that Bitcoin and Ethereum are NOT securities. However, his stance changed completely once he became SEC chairman. Specifically, since the collapse of FTX he has declared an all-out war against crypto and seems to have changed his opinion on whether these assets are indeed securities. There has been lots of footage and evidence to show that he is not willing to give a verdict on whether Ethereum is a security and has been trying to shut down cryptocurrency exchanges left right and centre. This has caused a lot of concern, instability and disruption in the industry.
2. Impact of Gensler's Stance on Crypto's Mainstream Recognition
So how is it possible that Gensler's stance is actually helping crypto? Well for starters, Cryptocurrency regulation has been a hot topic for the past couple of years now thanks to these harsh actions. His almost-irrational behaviour has sparked outrage in the industry, so much so that it is a theme that is constantly being discussed in the media, news and even congress. Even though it may seem that it's trending for the wrong reasons, I still believe that there is no such thing as "bad publicity". Almost everyone seems to be aware of the existence of crypto, and even though they might know about it for the wrong reasons, the fact that they do means that that stance could possibly change in the future. Here's where things get interesting ( in my opinion).
For cryptocurrency to become adopted and mainstream, it doesn't need to appeal to the masses at first. Rather, it needs to appeal to the right people that can bring it to the masses first. Let's break this argument down a little bit.
A) Most billionaires, Companies and Industries don't like the SEC. Why? Because most of these people or agencies are where they are today because they have innovated something. Something that needed regulation in some shape or form, and they have all gone through their fair share of legal disputes with the SEC in one way or another. Here are some linked examples
- Elon Musk vocal on how he hates the SEC
- ‘Defund the S.E.C.’ Becomes a Rallying Cry on Trump’s Social Media Site
- Wells Fargo and Unauthorized Accounts Scandal
Although it is difficult to say whether the SEC was right or wrong in these legal disputes - it is enough to say that these successful companies and billionaires have had their fair share of arguments with the SEC and do not see them favourably. Knowing how harsh and unjust the SEC may be, might serve for them as a motivation to look into cryptocurrency as they may be holding a grudge against the SEC and could probably look into the potential that crypto might have knowing that the SEC may be wrong. These would be the people ( not specifically, but the type of people that have the kind of power ) that crypto needs to win over in order to execute mass adoption properly.
B) Examples of how innovation was met with regulation resistance
Internet and E-Commerce: The early internet had regulatory uncertainty, allowing e-commerce to thrive before regulations caught up.
Ride-Sharing Services (Uber and Lyft): Ride-sharing services faced opposition from traditional taxi industries but eventually gained public support.
Napster and Digital Music: Napster's music-sharing platform faced legal action, leading to the growth of legal digital music services like iTunes and Spotify.
Medical Marijuana and Cannabis Legalization: State-level legalization efforts led to a legal cannabis industry despite federal opposition.
All these examples ( amongst others) were met with incredible resistance both from regulators and even the public at first. However, after a while people saw the use and need for these examples and have now become (or are becoming) an essential part of today's lifestyle.
3. Gensler's Unintentional Advocacy for Crypto
So what does this all mean and how does this make Gary Gensler the Crypto Villain we needed?
While Gary Gensler may currently wear the cape of crypto's villain, there's an intriguing paradox at play here. His aggressive stance against cryptocurrency may inadvertently serve as a catalyst for its ultimate success. By pushing against the industry, he has brought it to the forefront of public and legislative discourse. This increased scrutiny, while uncomfortable in the short term, may ultimately drive conversations that lead to more sensible and supportive regulations. In the grand tapestry of innovation, villains often play a pivotal role in pushing the story forward. Gensler's antagonistic approach might just be the unexpected nudge the crypto industry needs to step into the limelight and, ultimately, into the future.
Again, I'd like to emphasize that this is just an invitation to have a different perspective on the ongoing issues. It is very difficult to see this perspective as true while we are going through it at the moment. However, I do have hope that the struggles we are going through now are going to make the industry stronger.
"Creative destruction is the essential fact about capitalism." - Joseph Schumpeter
