The crypto world has long painted Gary Gensler as its chief adversary—a regulator with a sharp axe and no interest in compromise. But new revelations suggest that might have only been part of the story.
In a surprising twist, Rep. Patrick McHenry recently peeled back the curtain on Gensler’s time as Chair of the U.S. Securities and Exchange Commission (SEC). Speaking on the Crypto in America podcast, McHenry painted a picture of a man very different from the anti-crypto figure we saw in headlines—a man who, behind closed doors, may have harbored a quiet respect for digital assets and blockchain innovation.
A Contradictory Legacy?
When asked whether Gensler was as anti-crypto in private as he appeared to be in public, McHenry didn’t hesitate: “No… Nope.” His response has raised eyebrows across the industry, especially given Gensler’s aggressive public stance during his tenure at the SEC.
McHenry described interactions with Gensler as “confusing,” noting that in private conversations, the former SEC Chair would sometimes acknowledge the promise of crypto and blockchain. Yet, once in the public spotlight, Gensler often reverted to harsh enforcement tactics and broad skepticism of the industry.
This isn’t entirely surprising when you look at Gensler’s background. Before heading the SEC, he taught at MIT, where he praised blockchain technology and discussed decentralized finance with genuine enthusiasm. Some even credit him with helping shape foundational concepts like airdrops in the early days. That intellectual curiosity, however, seemed to vanish once he stepped into the regulatory hot seat in 2021.
Crackdowns Over Clarity
Gensler’s SEC era was defined more by enforcement than education. Under his leadership, the commission initiated over 100 actions against crypto firms—ranging from giants like Binance and Coinbase to lesser-known projects. The core criticism? That these actions lacked the legal clarity the industry so badly needed.
Instead of building a modern framework for decentralized assets, the SEC leaned heavily on the 1946 Howey Test, a legal relic originally intended for traditional investment contracts—not token economies or smart contracts. This disconnect created a fog of uncertainty, leaving startups and even established firms vulnerable to surprise enforcement.
Academic studies have confirmed what the market felt: regulatory actions during Gensler’s tenure were financially damaging. One 2025 research paper found that SEC enforcement announcements led to an average price decline of 5.2% in just three days, extending to 17.2% within a month. Confidence was eroded, innovation stifled, and companies began looking for exits.
The Crypto Exodus and Industry Backlash
The regulatory ambiguity under Gensler had real-world consequences. Faced with unrelenting scrutiny and little guidance, several major crypto players chose to move their operations offshore. Coinbase, for instance, ended relationships with law firms tied to former SEC officials, accusing the agency of deliberately undermining the industry. Gemini took a more symbolic step, declaring it would no longer hire MIT graduates unless Gensler was removed from the faculty.
Clearly, the industry didn’t take Gensler’s actions lightly.
A Man Caught Between Worlds?
The emerging picture is of a man walking a political tightrope. Gensler may have personally believed in blockchain’s potential, but as SEC Chair, he was operating under the pressures of a politically charged environment—one where crypto was a hot-button issue in both the Senate and the broader public.
McHenry suggested that political dynamics played a role in Gensler’s transformation from academic optimist to regulatory hardliner. Whether out of caution, calculation, or career necessity, his public actions diverged from his private views—and the industry felt the consequences.
The Final Verdict?
Now, as the U.S. shifts under a crypto-friendlier administration, Gensler’s complicated legacy is up for debate. Was he a believer who couldn’t act? Or an enforcer who masked personal doubts?
Perhaps the truth is more nuanced. In the end, Gensler might be remembered not for being anti-crypto or pro-crypto, but for being the man who tried to control a rapidly evolving industry without ever fully deciding which side he was on.
One thing is clear: the aftershocks of his time at the SEC are still being felt—and the crypto world isn’t likely to forget anytime soon.
