There Seems To Be Some Type Of Game Being Played By Gensler

Gary and the SEC

Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), has been in the news lately for his actions towards the cryptocurrency community. While he is making headlines for cracking down on crypto companies that have not engaged in misconduct, when there is actual fraud taking place, he is not seen to be doing much about it. In this article, we will look at Gensler’s ties to the crypto community and try to explain what might be going on at a deeper level.

On February 13, a federal judge put the SEC and the Commodity Futures Trading Commission cases against former FTX CEO Sam Bankman-Fried on hold. This news was overshadowed by the breaking news that the SEC was suing crypto firm Paxos for minting Binance’s stablecoin, Binance USD (BUSD). The issue is not whether stablecoins are securities or not, but that the Paxos story broke on the same day as United States District Judge Kevin Castel delayed Bankman-Fried’s case, and the ensuing stablecoin debate detracted from what should have been the bigger story.

Judge Castel granted a Justice Department motion to stay the FTX lawsuits filed by the SEC and the CFTC. Unsurprisingly, Bankman-Fried consented to putting the civil cases on hold. Since pleading not guilty to defrauding billions of dollars from his collapsed exchange and paying a $250 million bond, Bankman-Fried has been living at his parent’s Palo Alto mansion in California.

Delay tactics are nothing new in court cases. Putting time and distance between the defendant and the crime itself is a well-established strategy. And let’s not forget: it took two months for Bankman-Fried to be extradited from the Bahamas and formally charged on US soil. Unfortunately, the real story here is far more insidious. On February 9, it was announced that Kraken would not only have to shut down its crypto staking service in the US but also pay a fine of $30 million in its settlement with the SEC. Naturally, the internet was on fire with the news and its ramifications for American crypto consumers.

Brian Armstrong

Coinbase founder and CEO Brian Armstrong announced that his company would fight back, tweeting on February 12 that “Coinbase’s staking services are not securities. We will happily defend this in court if needed.” Encouraging words. But it’s all just a distraction. Gensler’s crypto crackdown taking place under the guise of investor protection is the misdirection part of the trick.

“Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection,” Gensler said.

It’s not about investor protection. It’s about keeping the public’s and the media’s eyes on the “cryptocurrency as securities” story while Gensler dupes us into forgetting that he met with Bankman-Fried in the months leading up to the FTX catastrophe – yet failed to prevent it.

In 1999, research psychologist Christopher Chabris and cognitive scientist Daniel Simons asked a group of people to watch a video and count the number of times the players wearing white shirts passed a ball. What the viewers often failed to notice was a person in a gorilla suit who walked right through the circle of players.

Meeting with SBF

It’s been reported, but little investigated, that Gensler met with Bankman-Fried prior to the FTX collapse. In March 2022, the SEC chair had a 45-minute Zoom call – which was characterized as “unusual” – where they discussed, among other things, a new trading platform.

Gensler has also indicated that he plans to ramp up the SEC’s focus on cryptocurrencies and blockchain technology, and there are concerns among some in the crypto community that this could lead to overregulation and a stifling of innovation in the space.

However, it’s important to note that Gensler is not necessarily anti-crypto. In fact, he has expressed support for the potential benefits of blockchain technology and the potential for cryptocurrencies to offer greater financial inclusion and access. He has also acknowledged the need for clear regulations in the space to protect investors and prevent fraud.

What is really going on?

So, what is really going on with the SEC and crypto at a deeper level? It’s likely a complex combination of factors. On one hand, there is certainly a need for increased oversight and regulation of the crypto space to prevent fraud and protect investors. On the other hand, there is a risk of overregulation and stifling innovation, which could ultimately harm the growth and development of the industry.

At the same time, there are also political factors at play. The Biden administration has made it clear that it intends to prioritize consumer protection and financial regulation, and the SEC is an important part of that agenda. Additionally, there is likely pressure from some lawmakers and regulators to crack down on cryptocurrencies and blockchain technology, which they see as a threat to traditional financial systems.

It’s also worth noting that Gensler is a relatively new SEC chair, having only been in the position since April 2021. It’s possible that he is still finding his footing and working to establish his priorities for the agency.


Ultimately, the SEC’s approach to crypto and blockchain technology will have a significant impact on the industry’s future. It’s important that regulators find the right balance between oversight and innovation, and work with industry stakeholders to develop clear and effective regulations that protect investors while also allowing for growth and development.

While there may be concerns and criticisms of Gensler and the SEC’s approach to crypto and blockchain technology, it’s important to avoid generalizations and false information. The reality is that the relationship between regulators and the crypto community is complex and multifaceted, and requires careful consideration and thoughtful dialogue to ensure a positive and productive future for all parties involved.

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