The “Gensler winter” and its aftermath is upon us, writes Stefan Muehlbauer, CertiK Head of U.S. Government Affairs, in a viral new op-ed.
Under former SEC Chair Gary Gensler, crypto firms faced a campaign of “regulation by enforcement,” marked by high‑profile lawsuits and an intentional refusal to provide clear compliance pathways.
This era, Muehlbauer argues, was defined by a calculated ambiguity that stifled domestic innovation, with many warning that the industry’s brightest minds and most significant capital would move to offshore jurisdictions. While the present atmosphere feels decidedly more optimistic, it is essential to note how this stability is tethered to political appointments rather than established law
Gensler’s SEC brought cases against major platforms including Binance, Coinbase and Ripple, helping to define what many in the industry saw as the “dark years” of US crypto policy. That period fueled fears that “the industry’s brightest minds and most significant capital would move to offshore jurisdictions,” Muehlbauer notes, capturing the sense of domestic innovation being deliberately chilled.
The current easing began almost immediately after Donald Trump returned to the White House. In his first week back in office, Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technology,” pledging to “support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”
Today with the industry currently enjoying a more friendly approach from Washington, starting with President Trump’s signing of an executive order supporting digital assets in his first week in office. A feat bolstered by the SEC rescinding SAB 121, the SEC Commissioner issuing a statement proposing a four-part framework to categorize crypto assets, which required companies holding crypto assets to register them as liabilities, the dismissal of enforcement actions against crypto firms, including Coinbase, Kraken, and Ripple, and the appointment of Paul Atkins, a veteran crypto advocate, as SEC Chair.
Without formal legislative intervention, the crypto industry remains exactly one election cycle away from a return to the more hostile environment of the past. A new election cycle and a change from the current administration could usher in a new era of stringent oversight, effectively undoing the progress made in establishing the United States as a hub for financial technology. The threat may not feel immediate in the short term, but there is a coalition of politicians who view the legislative progress in digital assets as risking a financial meltdown.
Executive pivots are not a regulatory foundation
That order explicitly revoked Joe Biden’s 2022 digital asset directive and banned federal agencies from “undertaking any action to establish, issue, or promote CBDCs” in the United States or abroad. At the same time, it set up a President’s Working Group on Digital Asset Markets to push a unified, “technology‑neutral” regulatory framework within 120 days.
The SEC followed that political signal with a sharp pivot of its own. In 2025 the Commission dropped or resolved key cases against Coinbase, Binance, Kraken, Consensys and Ripple — all but one without financial penalties — and rescinded Staff Accounting Bulletin 121, a move that removed a major balance‑sheet obstacle to banks offering crypto custody.
Under Chairman Paul Atkins, described by Muehlbauer as “a veteran crypto advocate,” the SEC also issued a four‑part taxonomy that split crypto assets into new regulatory buckets and signaled that US dollar‑backed stablecoins and memecoins would not be treated as securities. A Cornerstone Research report found the SEC initiated only 13 crypto‑related actions in 2025, a roughly 60 percent decline from 33 in 2024, underscoring how much enforcement has cooled.
For Muehlbauer, that is precisely the problem. “This shift has occurred primarily through executive and administrative pivots,” he writes, stressing that it “remains easily reversible” because “future SEC or CFTC leadership can roll back rules made without the basis of legislation.”
Why the Senate is now the fulcrum
The industry’s real risk, he argues, is complacency. The United States is only “one election cycle away from a return to the more hostile environment of the past,” since a new administration could reinstall a Gensler‑style SEC and revive the same “calculated ambiguity that stifled domestic innovation.”
The Digital Asset Market Clarity Act, advanced by the House with bipartisan support, shows how statutory guardrails could look. The bill would give the CFTC jurisdiction over “digital commodities,” leave “restricted digital assets” to the SEC, and allow tokens to transition from securities to commodities once their networks are sufficiently decentralized. Companies would face strict initial disclosure rules and a provisional registration regime rather than ad hoc enforcement.
But that framework remains stuck in the Senate, where a rival Responsible Financial Innovation Act draft would keep more power with the SEC and where some Democrats warn that expansive deregulation risks a “financial meltdown.” Muehlbauer’s warning is blunt: if the Senate squanders the current window of alignment, “the ‘Gensler years’” may not remain a historical footnote, but a recurring pattern every two to four years.
For builders and institutional allocators deciding where to deploy capital, that distinction is existential. “Institutional investors and long‑term builders require the certainty that only a congressional mandate can provide,” he writes, arguing that only legislation can finally move digital assets “out of the realm of politics and into the realm of established commerce.”
