Gary Gensler had a lot to say about crypto in 2021

The head of the SEC has been vocal on the need for more regulation.

SEC Chairman Gensler

Gary Gensler has a lot to say about Wall Street and crypto.

Photo: Melissa Lyttle/Bloomberg via Getty Images

Click banner image for more holiday coverage for 2021

In his short time heading the SEC, Gary Gensler has shaken up Wall Street and the crypto industry.

Most of this he’s done just with his words, before the agency under his leadership has taken substantial enforcement or regulatory actions.

He’s had a lot of say about the need for stronger regulatory control of Wall Street, crypto and Chinese companies, which has affected markets and drawn strong reactions from the industry.

Gensler, who was confirmed to head the SEC in April, was no stranger to Wall Street, having been a partner at Goldman Sachs. He had a background in cryptocurrency as well, having taught a course on the topic at MIT. That led to some hoping he would prove somewhat friendly to the crypto industry, or at least not hostile.

With his background running the CFTC where he helped reform credit default swaps after the 2008 financial crisis, he was expected to ramp up enforcement on Wall Street after the Trump years. At the time he was confirmed, regulators and politicians were focused on Robinhood and the meme-stock frenzy that took over Wall Street in January. Crypto was barely on Washington’s agenda.

Then Gensler started talking. Crypto said it wanted an informed regulator, but Gensler showed he knew the industry all too well. Here are some of his top moments this year.

“Inherent” conflicts

In early May, Gensler made his first major appearance in Congress as head of the SEC at a House Financial Services Committee hearing. He made it clear that payment for order flow, in which wholesalers pay retail brokers for handling retail orders, would be scrutinized by the SEC.

He noted that payment for order flow can be a “conflict of interest” and that these conflicts were “inherent” in the system. Gensler cited a case that Robinhood settled with the SEC in December 2020, noting that the Robinhood had been able to decide how much of the profit from trading spreads it would keep and how much it would pass on to investors.

Gensler also made it clear he wasn’t happy about the current regulatory environment for crypto.

China watch

In July, Gensler warned of the risks of Chinese companies listing in the U.S. He focused on variable interest entities or VIEs, which Chinese companies have long used to sidestep that country’s restrictions on foreign ownership. Gensler was seeking to provide greater transparency for investors in Chinese companies, which do not always make the same disclosures or receive the same auditing oversight as U.S. companies. Under pressure from both American and Chinese regulators, DiDi delisted its shares from the New York Stock Exchange in December.

“Wild West”

On Aug. 3, Gensler returned to crypto in a speech at the Aspen Security Forum: “Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West."

“This asset class is rife with fraud, scams, and abuse in certain applications,” he said. “There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information.”

Two days later, Gensler called for legislation in a letter to Elizabeth Warren to address crypto trading, lending and decentralized finance. It was a recognition that there are some things Gensler can’t do himself at the SEC without federal legislation — which is a likely reason why he has been so public about talking about crypto but has yet to take substantial action.

“In my view, the legislative priority should center on crypto trading, lending, and DeFi platforms,” he wrote. “Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.”

A reminder: Gary Gensler is not your daddy

In September, Gensler told the Senate Banking Committee that he wouldn’t rule out having the SEC regulate stablecoins since “they may well be securities.” While he didn’t come out and say they definitely are securities, he indicated that the SEC could regulate stablecoins — or at least is interested in doing so. Later, in November, the President’s Working Group called for bank-like regulation of the fiat-linked digital tokens.

He also pushed back on senators’ criticism that the SEC has been vague on when a crypto token is and isn’t a security. "I think that there's a fair amount of clarity over the years. I think at the heart of our securities laws [is] protecting investors against fraud. They get to decide. They get to take the risk. I'm not negative or minimalist about crypto. I just think it would be best if it's inside the investor protection regime that Congress laid out."

In perhaps the most memorable exchange of the hearing, he was grilled by a senator on his agency’s view on climate risk disclosure. "The people and the companies that you regulate as chairman of the SEC, do you consider yourself to be their daddy?" Sen. John Kennedy asked.

"No," Gensler said.

"Then why do you act like it?" Kennedy responded. "Why do you impose your personal preferences about cultural issues and social issues on companies. … I'm sure you have you have personal feelings about abortion. Do you have plans to implement or impose those values on companies?"

"Sir, I think I am not doing that," Gensler replied. "What I've been trying to do is say, if investors want information about climate risk, we at the SEC have a role to put something out to notice and comment, do the economic analysis and really see what investors are saying."

Poker face

Later in September, Gensler compared crypto to “poker chips” at a Washington Post event. He again noted that help from Congress would make regulation easier. Still, he said, the SEC already had plenty of room to regulate crypto. “But in terms of the SEC, I do think we have robust authority, but there are gaps as I’ve identified them,” he said.

Meanwhile, a number of major players in the crypto industry had begun responding to Gensler’s jabs. Their response has largely been looking to put someone other than Gensler in charge. Andreessen Horowitz said it was time to “look beyond the SEC,” while Coinbase made an even more direct critique of the agency, proposing a new regulator to oversee crypto. Coinbase was already unhappy about the SEC not approving its Coinbase Lend product.

Marking territory

In a November speech at the Securities Enforcement Forum, Gensler took up sports as a metaphor: “Think about a football game without referees. Teams, without fear of penalties, start to break the rules. The game isn’t fair, and maybe after a few minutes, it isn’t fun to watch.” He went on to defend the SEC’s role in protecting investors.

It was as if he was responding to some of the crypto industry’s proposals and marking the SEC’s territory. While there are many agencies that have oversight on parts of the crypto industry — such as the Office of the Comptroller of Currency and the Commodity Futures Trading Commission — Gensler made it clear he was not giving up the SEC’s role.

And he defended the SEC’s moves to rein in some boundary-pushing firms. “Some market participants may call this ‘regulation by enforcement,’” he said. “I just call it ‘enforcement.’”

Cleanup on aisle three

In December, Gensler talked up the need for proactive regulation, rather than swooping in after a crisis. “We're gonna have a spill on aisle three,” Gensler said at the DACOM Summit. “And the public's gonna say: 'Where was the official sector?'” But he struck a more conciliatory tone at a Wall Street Journal event that month, asking crypto exchanges to “come in, work with the SEC, get registered.” Crypto trading firms that hold customers’ tokens as well as executing orders became a focus of Gensler’s regulatory rhetoric late in 2021, with the SEC chair positioning them as a natural subject for his agency’s oversight.


The minerals we need to save the planet are getting way too expensive

Supply chain problems and rising demand have sent prices spiraling upward for the minerals and metals essential for the clean energy transition.

Critical mineral prices have exploded over the past year.

Photo: Andrey Rudakov/Bloomberg via Getty Images

The newest source of the alarm bells echoing throughout the renewables industry? Spiking critical mineral and metal prices.

According to a new report from the International Energy Agency, a maelstrom of rising demand and tattered supply chains have caused prices for the materials needed for clean energy technologies to soar in the last year. And this increase has only accelerated since 2022 began.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (

Sponsored Content

Why the digital transformation of industries is creating a more sustainable future

Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.


The 911 system is outdated. Updating it to the cloud is risky.

Unlike tech companies, emergency services departments can’t afford to make mistakes when migrating to the cloud. Integrating new software in an industry where there’s no margin for error is risky, and sometimes deadly.

In an industry where seconds can mean the difference between life and death, many public safety departments are hesitant to take risks on new cloud-based technologies.

Illustration: Christopher T. Fong/Protocol

Dialing 911 could be the most important phone call you will ever make. But what happens when the software that’s supposed to deliver that call fails you? It may seem simple, but the technology behind a call for help is complicated, and when it fails, deadly.

The infrastructure supporting emergency contact centers is one of the most critical assets for any city, town or local government. But just as the pandemic exposed the creaky tech infrastructure that runs local governments, in many cases the technology in those call centers is outdated and hasn’t been touched for decades.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at


'The Wilds' is a must-watch guilty pleasure and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Our favorite things this week.

Illustration: Protocol

The East Coast is getting a little preview of summer this weekend. If you want to stay indoors and beat the heat, we have a few suggestions this week to keep you entertained, like a new season of Amazon Prime’s guilty-pleasure show, “The Wilds,” a new game from Horizon Worlds that’s fun for everyone and a sneak peek from Adam Mosseri into what Instagram is thinking about Web3.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.


Work expands to fill the time – but only if you let it

The former Todoist productivity expert drops time-blocking tips, lofi beats playlists for concentrating and other knowledge bombs.

“I do hope the productivity space as a whole is more intentional about pushing narratives that are about life versus just work.”

Photo: Courtesy of Fadeke Adegbuyi

Fadeke Adegbuyi knows how to dole out productivity advice. When she was a marketing manager at Doist, she taught users via blogs and newsletters about how to better organize their lives. Doist, the company behind to-do-list app Todoist and messaging app Twist, has pushed remote and asynchronous work for years. Adegbuyi’s job was to translate these ideas to the masses.

“We were thinking about asynchronous communication from a work point of view, of like: What is most effective for doing ambitious and awesome work, and also, what is most advantageous for living a life that feels balanced?” Adegbuyi said.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at

Latest Stories