SEC’s Gary Gensler must refrain from doing more damage to crypto on the way out the door

The numbers tell a harsh story. Under Chairman Gary Gensler’s leadership, the SEC has spent an inordinate amount of its time and resources targeting crypto—an industry that represents, by the Commission’s own discretiononly 0.25% of global markets. This disproportionate focus has yielded little beyond costly courtroom defeats and damaged institutional credibility. of the Commission setback in the Ripple case and other significant reversals show the flaws in its strategy of regulation by enforcement.

Latest Blockchain Association and HarrisX vote reveals that two-thirds of voters want Congress, not unelected regulators, to establish clear rules for crypto markets. This should surprise no one. Americans understand that innovation requires regulatory clarity, not arbitrary enforcement action. They have seen how the SEC’s approach has pushed innovation, jobs and economic opportunity overseas while leaving American consumers with fewer protections than a well-regulated market would otherwise provide.

This context makes any further enforcement action during Chairman Gensler’s remaining term particularly problematic. The Blockchain Association has consistently opposed last-minute regulatory moves by outgoing administrations, regardless of party. In December 2020, we strongly criticized the Treasury’s urgent “midnight rules” on digital asset wallets. The same principles apply today: major legislative decisions should not be taken in transitional periods where they lack democratic legitimacy, and especially when they can be quickly reversed by the next Commissioner.

The costs of ignoring this principle extend beyond immediate market disruption. Each enforcement action launched in these final months would further erode the SEC’s institutional credibility and waste taxpayer resources on cases likely to be abandoned or reversed. More importantly, it would represent a form of legislative defiance against the clear preference expressed by voters for a different approach.

The way forward is clear. Chairman Gensler should immediately halt all planned enforcement actions against crypto firms and instead focus on an orderly transition. This would allow his successor to implement a legislative framework aligned with both congressional intent and market realities. It would also help restore the Commission’s reputation for thoughtful, measured regulation rather than partisan activism.

The crypto industry stands ready to work with Congress on comprehensive legislation that protects consumers while promoting innovation. We have consistently advocated for appropriate regulation – but it must come through proper channels, with democratic accountability and due process. The era of regulation-by-enforcement has failed. It is time for the SEC to recognize this reality and step back from a strategy that has harmed American competitiveness while failing to achieve its stated goals.

The stakes extend beyond crypto. How the SEC conducts itself during this transition will set a precedent for future administrative changes. By choosing restraint over activism, Chairman Gensler can help restore institutional norms that benefit all market participants, regardless of administration or party.

The message from voters and markets is unequivocal: the SEC’s crypto enforcement campaign has been a costly mistake. To continue it now, in the face of clear public rejection, would only add to the damage. Chairman Gensler should do what is right for the markets, the Commission’s reputation, and American innovation. It’s time to stand down.