Inside Gary Gensler’s Crypto Playbook

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Gary Gensler is a master at playing with the media. Last October, for example, the chairman of the Securities and Exchange Commission released a video early on a Monday morning announcing that the agency had fined Kim Kardashian for her role in promoting an obscure crypto token. Although the incident dated back to June 2021 and was widely considered insignificant, the mix of celebrity scandal and timing of the video gave Gensler and the SEC full media coverage.

The crypto industry has long chafed at such antics, arguing that Gensler should instead focus on creating a regulatory framework for digital assets. But lately, the industry has grown doubly frustrated as Gensler has deployed his media savvy to distract from crypto-related legislative proposals in Congress and onto his own agency.

A stark example was in early June, when the House Agriculture Committee held a hearing called The Future of Digital Assets that aimed to identify shortcomings in the current regulatory system. On the morning of the hearing, however, the SEC filed a sweeping lawsuit against Coinbase just hours after suing the industry’s largest exchange, Binance. The result, predictably, has been a flurry of courtroom and media attention on the SEC lawsuits and very little on the alleged regulatory loophole.

The timing of the SEC lawsuits could be considered coincidental, but for a tendency for the agency to make crypto-related announcements to coincide with previous hearings. As the chart below shows, Fortune has identified at least six examples of this in 2023 alone.

While several examples are lawsuits filed to coincide with scheduled crypto hearings in Congress, the SEC has used other tactics. For example, on two separate occasions, the agency posted a crypto-focused office hours video with Gary Gensler on Twitter on the day of legislative hearings.

In interviews with Fortune, crypto industry executives have fumed over these tactics. An executive, who asked not to be identified for fear of reprisal from Gensler, complained that the SEC chairman sought to cross-schedule the congressional agenda with his and accused him of seek to thwart the efforts of elected legislators. It’s unclear, however, if Gensler’s behavior amounts to anything untoward.

Case Western University professor Jonathan Adler, widely cited for his research on administrative law, noted that agency heads like Gensler are political appointees and behave accordingly.

They often have political agendas they’re trying to pursue, and that involves making a public case for what the agency is trying to do, Adler told Fortune.

Adler noted that a handful of agency chiefs, including the late FTC Chairman Michael Pertschuk, have taken public stances over the years that have raised questions about their ability to be impartial to the companies they serve. regulated. But he says he doesn’t believe Gensler’s behavior has crossed such a line, though the crypto industry may resent his attempts to thwart legislative progress.

It’s understandable why people on the other side [of these tactics] might not like it, Adler said.

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