A new petition on Change.org is currently gathering signatures to have Gensler removed from his position at the commission.
Crypto Investors Outraged
For the creator of the online petition, Wall Street’s top cop Gary Gensler has touched a nerve.
A band of crypto investors has recently rallied around a petition that accuses Gensler of obstruction of justice. According to the petition, he must step down because he failed to enforce laws relating to naked short selling. Moreover, his failure to provide competent oversight of market makers has cost retail investors millions of dollars.
The petition also references dark pool abuse by Citadel Securities and Citadel the Market Maker. As you may know, Citadel has a knack for running afoul of U.S. trading laws. The market maker was accused of unfair trading regarding shares of meme stock Gamestop using online retail broker Robinhood and purchasing customer order information from it. Notably, Citadel continues to operate despite manipulating the stock market.
It’s worth mentioning that most people signing this petition are particularly unhappy with the SEC boss’s approach toward cryptocurrencies. Before Gensler took the helm at the SEC, the Commission’s leadership had publicly declared that both bitcoin and ethereum are not securities. But Gensler has only mentioned bitcoin in his most recent comments and has sidestepped questions about ethereum’s status as a security.
Gary Gensler Sharpens Criticism Of Crypto And Exchanges
Just days ago, Gary Gensler — who calls the crypto sector the “Wild West” — reiterated his belief that cryptocurrency exchanges should be registered and regulated like securities exchanges and warned that regulating cryptocurrencies in another manner would “risk undermining 90 years of securities law.”
While the SEC has still not clarified which crypto assets it classifies as securities and some that it believes could be considered commodities (and thus outside its jurisdiction), the agency has opted for ruthless enforcement actions. Many crypto firms in the U.S. do their best to follow the poorly articulated laws only to face later legal repercussions, case in point Ripple and Coinbase.
Generally, industry pundits note that the SEC’s actions are making it harder for investors and innovators to comply with laws due to a lack of clarity and better communication from the regulator.
The quest to remove Gensler from office is a long shot — at least right now. The petition had crossed 19,500 signatures at the time of writing. However, it’s believed that Change.org petitions must hit 100,000 signatures to get an official response from authorities.