Op-Ed: Rep. Mike Flood: Gary Gensler’s legacy of chaos
Gensler’s work didn’t start in 2021 with this appointment. He’s a long-time Democrat political appointee who served in the Treasury Department in the Clinton administration and the Commodity Futures Trading Commission in the Obama years.
After the 2020 election, President Biden appointed him to run the SEC. His time there has been marked by inconsistent, ill-conceived leadership that has stifled innovation.
During his tenure he’s worked to incorporate Environmental, Social, and Governance (ESG) measures into investing decisions, and he’s finalized the climate rule — which would require public companies to disclose emissions data that has no relationship to what investors care about most: the bottom-line.
He’s stood in the way of crypto, trying to quash the up-and-coming digital assets markets with failed enforcement actions and a hollow insistence that digital asset firms could simply “come in and register” their tokens with the hostile regulator.
A prime example of this is his infamous Staff Accounting Bulletin 121 — also known as SAB 121. SAB 121, despite widespread opposition, works effectively as a regulation even though it never went through the normal Administrative Procedures Act process required for one.
This specific bulletin effectively requires banks to put digital assets held in custody on their balance sheet. Simply put, that’s not how custody usually works. This bulletin upends custodial practice for banks, and it is effectively keeping banks out of this market entirely. That’s not good for consumers or for investors.
Earlier this year, I led an effort to overturn SAB 121, which passed both houses of Congress with bipartisan support. President Biden ultimately sided with Chair Gensler and vetoed it, leaving SAB 121 in place. I look forward to working with the next SEC Chair to rollback SAB 121.
It’s not just SAB 121. Right now, there is no federal regulatory framework guiding federal agencies on how to approach digital assets. Gensler has taken advantage of this, going rogue, using a regulation by enforcement tact that forces the industry and the SEC to battle it all out in court. Put simply: he could have avoided this by doing his job and providing regulatory clarity for an industry that needs it to survive.
It should be no surprise that Gensler opposed the digital assets regulatory framework that passed the House earlier this year on a bipartisan basis. 71 Democrats joined House Republicans to pass this common sense framework. Even though the Democrat-led Senate has refused to take it up, it represents a breakthrough moment for cryptocurrency and is likely to inform the work of the unified Republican government as the next Congress begins in January.
Whether the chair leaves on his own or President Trump delivers his famous line on January 20, 2025, there’s an incredible opportunity for the new administration to turn the page on the Gensler era.
For America to lead the global financial world, the SEC needs to offer consistent, reliable regulations that foster both stability and growth. While Chair Gensler’s tenure has done the opposite, I expect that President Trump will provide the regulatory clarity that fintech leaders, investors, and consumers deserve.
As a member of the Financial Services Committee, I look forward to collaborating with President Trump as he works to replace the chaotic, hostile regulatory environment with frameworks that prioritize sound decision-making and economic growth. Together, with a unified Republican government, we will restore the SEC’s original mandate: to protect investors, foster fair markets, and enable economic growth, ensuring that America remains at the forefront of financial innovation in both traditional or digital settings.
Rep. Mike Flood represents Nebraska’s 1st District in Congress. He is also a member of the U.S. Strategic Command Consultation Committee, a councilor for the Aksarben Foundation, and is a member of the Norfolk Rotary Club.