Gensler Praises AI’s Potential, Mirroring Past Crypto Excitement

A Household Name in Crypto

Gary Gensler, a name that, by now, will sound familiar to anyone in crypto – even though, possibly for all the wrong reasons.

Gensler has led the United States Securities and Exchange Commission (SEC), the regulator primarily tasked with protecting the investing public in regards to anything deemed a security under strict US laws and definitions. The term ‘Howey’ probably rings a bell. 

While Gensler was not the chair who initiated the lawsuit against Ripple and XRP, under his leadership, the agency has undertaken considerable enforcement action against crypto entities. Of course, Gensler states that it’s not solely his decision to bring enforcement action, but rather a collective decision made by the Chairman and the four Commissioners.

Gensler Was Once Open to Crypto

Gary Gensler, known for the SEC’s aggressive actions, and his agency have led a significant crusade against crypto, all the while claiming that the “rules of the road are clear.” This stance has greatly influenced the crypto landscape in the United States and earned Gensler the title of CoinDesk’s Most Influential of 2023.

But we have to remember that Gensler wasn’t always as seemingly anti-crypto as he appears now. Gensler once held a series of lectures at MIT from 2018 to 2020 for a course titled ‘Blockchain and Money.’ 

These lectures, highly recommended for those not familiar, demonstrate not only a pretty thorough understanding of crypto but also show the complete opposite attitude the SEC chair has now. While one video in the series (episode 18) is missing for unknown reasons, Gensler generally expressed favourable views towards blockchain and crypto and the positive influence they could have.

In one of those lectures, Gensler posed a question we still grapple with today, “Is cryptocurrency a security or a commodity?” To which he replied:

Gensler even praised Algorand and its lead developer, Silvio Micali, who was his colleague at MIT at the time.

No doubt this will be the subject of at least a few lines of questioning at tomorrow’s House Financial Services Committee hearing.

Gensler previously called Algorand a “great technology” that you could build Uber and Lyft on.

Today, he declared $ALGO an unregistered security. pic.twitter.com/Sn6JVrEgq4

— Eleanor Terrett (@EleanorTerrett) April 17, 2023

Gensler on AI

Fast forward to 2023 and not only is Gensler on a mission to throw spanners into the works of the crypto world, but he is also downplaying its significance, suddenly heralding artificial intelligence (AI) as the next big thing.

While he believes that AI has a transformative effect, something many believe to be also true for crypto, the chair also states that AI has been used for years. He specifically refers to natural language processing and pattern recognition, which indeed has been used for some time now. These, combined with deep learning, have led to the development of our current AI systems.

It’s interesting to observe Gensler’s shift from being pro-crypto to anti-crypto, and now speaking so positively about AI. This raises questions: could this indicate potential future enforcement actions by the SEC, as hinted by Australian lawyer Bill Morgan in his post?

Until you call it a security, try to extend the SEC’s reach to it and stifle innovation like you are doing with crypto innovation in the US. https://t.co/Bm1VU11fIR

— bill morgan (@Belisarius2020) December 18, 2023