Ram Ahluwalia’s Insights: Assessing Chair Gensler’s Influence on Crypto Regulation

The recent legal battles the U.S. Securities and Exchange Commission (SEC) waged against cryptocurrency companies could have far-reaching consequences for the entire industry. 

Ram Ahluwalia, a prominent figure in the financial world, has raised questions about the legacy of SEC Chair Gensler in this context. In an ideal scenario, Chair Gensler could have played a pivotal role in transitioning from the old centralized financial system to the new decentralized landscape. He had a comprehensive understanding of both traditional finance (TradFi) and cryptocurrencies.

He wrote on X, “The SEC has a string of decisive losses where judges are ruling 3-0. The SEC’s settlements don’t create a precedent. One has to imagine the SEC Chair is in a state of shellshock.”

However, the issue appears to be less about regulatory capture and more about political influence from Chair Gensler’s backers. The SEC has faced significant losses in court, with judges consistently ruling against its actions. However, settlements reached by the SEC in previous cases do not establish legal precedent. This has left the SEC Chair looking unsure during public interviews.

He added, “You can see it in public interviews’ tone and body language. There are: – questions followed by silence (Better Markets Interview) – statements like ‘the public should not assume the protections of the securities laws apply’ – followed by the opposite claim that securities laws are clear again.”

So, according to him, what’s happening is that both the SEC and the financial markets are dealing with more confusion and uncertainty. Chair Gensler’s legacy might make things more complicated than clear. He also said that courts had deemed the SEC’s approach to regulation via enforcement as ‘capricious and arbitrary.’ He added that future SEC Chairs are likely to abandon that unsuccessful strategy.