Massachusetts Institute of Technology (MIT) Sloan announced Tuesday the return of former SEC Chairman Gary Gensler as Professor of Practice. In rejoining the school, Gensler will be affiliated with the Global Economics and Management and Finance Groups, and his teaching and research will focus on artificial intelligence, finance, fintech, and public policy.
His role at MIT Sloan will also include co-directing the FinTechAI@CSAIL initiative at CSAIL, alongside Professor Andrew Lo, as stated in the announcement. This initiative is aimed at fostering collaboration between member companies and MIT researchers to explore the latest AI technologies, opportunities, and challenges in the financial sector.
“I am honored to return to MIT, whose faculty, staff, and students have long been at the cutting edge of research and technology,” Gensler said. “I’m thrilled to once again collaborate with MIT’s distinguished team of scholars creating a better future for all through artificial intelligence, finance, and technology.”
Bye!
Before taking office at the SEC in April 2021, Gensler was professor of the Practice of Global Economics and Management at MIT Sloan, specializing in blockchain and cryptocurrencies, areas in which he became deeply engaged.
During his early professorship, he also held a senior advisory role with the MIT Media Lab Digital Currency Initiative and co-directed MIT’s Fintech@CSAIL, where he played a key role in research on digital currencies and financial technologies.
The appointment comes after Gensler officially stepped down as SEC Chair on January 20, also the day of President Donald Trump’s inauguration. He served as the head of the top financial watchdog during the Biden administration.
Under Gensler’s leadership, the SEC initiated numerous enforcement actions against cryptocurrency businesses such as Ripple, Binance, and Coinbase, among others. The agency led by the former SEC Chair was also known for its enforcement-over-guidance approach, which pushed many firms out of the US market. It was viewed by industry figures as a barrier to innovation.
Cryptos Will Benefit
Following Gensler’s departure, the SEC, now led by acting Chairman Mark Uyeda, formed a new crypto task force aimed at crafting a comprehensive and, crucially, clear regulatory framework for digital assets.
The Crypto 2.0 initiative, led by Commissioner Hester Peirce, a long-time crypto advocate, marks a departure from the SEC’s previous playbook, which has drawn criticism for its heavy reliance on enforcement actions. The goal is to strike a balance between investor protection and innovation stimulation.
The newly established task force will tackle some key challenges, including drawing clear regulatory lines, creating workable registration processes for crypto businesses, developing sensible disclosure rules for crypto projects, and using enforcement tools more strategically.
The task force will be a collaborative effort, with expertise from across the SEC, input from the public, cooperation with Congress, coordination with the Commodity Futures Trading Commission (CFTC), and consultation with regulators abroad, the SEC shared in a statement.
Supportive Environment
Just days after announcing the crypto task force, the SEC rescinded Staff Accounting Bulletin No. 121 (SAB 121), a controversial accounting bulletin that required companies that hold custody of crypto-assets on behalf of users to account for those crypto assets as liabilities on their balance sheets.
Many in the industry had long criticized the accounting rule as it discouraged financial entities from offering crypto custody services, limiting their entry into the crypto market. The rule imposed huge compliance and reporting burdens on companies, raising costs and hindering their ability to scale their crypto operations.
The SEC issued Staff Accounting Bulletin No. 122 (SAB 122), efficiently repealing SAB 121. The removal of this accounting hurdle is expected to make it less burdensome for financial institutions to engage with crypto, thus leading to greater participation in the crypto market and fostering the development of new crypto products and services.
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