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This is the first of a three-part series based on Gary Gensler’s extensive past public statements about crypto. Links to Parts 2 and 3 will appear here as soon as they are published.

Like the heir to the chairman of the Securities and Exchange Commission, Gary Gensler’s most pivotal role in the future of crypto will be his thoughts on how cryptocurrencies intersect with securities regulation.

Where crypto complies with the SEC

The SEC has been a focus of the crypto world for a long time. While initial crypto enforcement actions were largely limited to outright fraud, the 2017 DAO report was access to even the best-intended projects. It was that report that determined that crypto pre-sales could fall into the securities offer category.

In the intervening years, however, the SEC has frustrated the crypto community with the lack of clear definitions as to which tokens should not fall into the category. This is a major problem because issuers of securities are subject to strict reporting requirements that, critically, make the path to decentralization difficult.

Real-time thoughts on SEC’s access to unregistered listings

While Gensler left public office in 2014 as Chairman of the Commodity Futures Trading Commission, in the years since he left an extensive body of work, he has been able to get at least some insight into his thoughts on initial coin offerings. Not the least of these the actual readings from his time at MIT, videos of which are from fall 2018, at the end of the ICO boom. Which Gensler noted:

“Most ICOs have already failed. And because they continue to fail so quickly – by the end of this year or at least halfway through next year, more than 90% or 95% of them will have failed if you take the whole total. So it’s pretty clear it’s going to come down “

Indeed, Gensler lectured on ICOs a few days after the SEC made clear that it was going to chase ICOs for not registering: “For the first time, they were really talking about illegal securities offers. So they used the word illegal. And they are starting to get to the place where they shut down some of these things that weren’t necessarily a scam or fraud, just saying you didn’t register. “