Former Congressman Patrick McHenry Says Gary Gensler's Anti-Crypto Stance Was 'Political Theater'

According to former Congressman Patrick McHenry, Gary Gensler's hardline stance against crypto was more political theater than personal conviction.

output: Former Congressman Patrick McHenry has accused outgoing U.S. Securities and Exchange Commission Chair Gary Gensler of juggling two personas — one in private conversations and another in public appearances — to serve political expediency over rational policy.

In a recent interview on the Bankless podcast, McHenry claimed that Gensler privately acknowledged the value of digital assets and even expressed support for innovations like token airdrops. However, in public statements, Gensler maintained a hardline stance against crypto, which McHenry attributes to pressure from figures like Senator Elizabeth Warren and the realities of political survival.

“He used to tell me in private conversations how much he appreciated the innovation in the sector. He’d say, ‘We need to be careful not to overregulate this industry. I like what they’re doing with airdrops and being able to fundraise easily.’ But then in the Senate Banking Committee, he’d pivot completely,” McHenry said.

The former lawmaker, who himself faced the demands of constituents and donors during his time in Congress, said Gensler’s duality distorted crypto regulation and ultimately eroded trust in the SEC.

McHenry also criticized Senator Warren’s vocal opposition to crypto, which he suggests is fueled by ideological bias rather than technical understanding.

“She has no interest in learning about the technology. She’s already decided that it’s bad and that people who are working on it are probably bad people,” McHenry said.

Gensler, who will step down in January 2024, has maintained that most digital assets, with the exception of Bitcoin, violate securities laws. However, under his leadership, the SEC approved spot Bitcoin ETFs, including those from BlackRock.

Despite the agency allegedly having an internal stance classifying ETH as a security, McHenry accuses Gensler of misleading Congress during hearings on the matter.

“They had already made a determination internally that ETH was a security, but then he went before Congress and said, ‘Oh, we’re still examining it. We’re still looking at the facts of the case.’ It was a complete fabrication,” McHenry said.

The former Congressman believes the incoming leadership change at the SEC, with crypto-friendly Paul Atkins set to take over, will bring a much-needed shift in regulatory priorities.