- Teddy Fusaro calls out former SEC Chair Gensler for mixing up crypto regulation and adopting a “merit regulator” approach.
- Fusaro emphasizes the SEC’s role as a disclosure regulator, not as a judge of an investment’s merit, urging a clearer stance on crypto.
- Under new SEC leadership, there is a noticeable shift toward a crypto-friendly approach, signaling potential for growth in the industry.
Teddy Fusaro, president of Bitwise, has strongly criticized Gary Gensler, the former chair of the U.S. Securities and Exchange Commission (SEC), over his approach to crypto regulation. Fusaro’s comments followed an interview with Gensler on CNBC, where the former SEC chair attempted to justify his stance on digital asset regulation. Gensler argued that cryptocurrencies lacked intrinsic value, a claim he said influenced his regulatory decisions during his tenure. He further stated that he had no regrets about his actions.
Fusaro, in response, challenged Gensler’s suggestion that the SEC’s role was to evaluate the “merits” of investments. According to Fusaro, Gensler’s approach seemed to imply that the SEC should decide which investments were “worthy” or not, which is not the agency’s job. Instead, Fusaro emphasized that the SEC’s core function is to ensure transparency and proper disclosures, allowing investors to make informed decisions based on accurate information. Fusaro argued that Gensler’s regulatory approach hindered the crypto industry’s progress by acting as a “merit regulator.”
The SEC’s True Role in U.S. Regulation
In the U.S., the SEC has always operated as a disclosure regulator, ensuring companies disclose relevant financial and operational information to investors. It does not decide whether an investment is inherently good or bad. In comparison, some foreign regulatory bodies, like China’s CSRC, act as “merit regulators,” judging the value of investments directly. Fusaro believes that Gensler’s regulatory overreach during his time at the SEC slowed the development of the U.S. crypto sector.
Since Paul Atkins took over as SEC chair, there has been a noticeable shift in the regulatory agency’s attitude toward crypto. During a recent appearance at the OECD Roundtable on Global Financial Markets, Atkins stated that “crypto’s time has come.” His comments indicated a commitment to providing clarity and regulatory certainty for the crypto sector. Under Atkins, the SEC has taken a more crypto-friendly approach, dismissing some lawsuits initiated during Gensler’s administration, including those involving major players like Coinbase, Binance, and Ripple.
This shift in regulatory direction signals a more open environment for crypto innovation in the U.S., with the new SEC leadership working to ensure that the industry can thrive without overbearing scrutiny.
