By Michael Scott
Former chair of the Securities and Exchange Commission (SEC) Gary Gensler has swapped regulatory agency for teaching artificial intelligence (AI). His return to the MIT Sloan School of Management presents the opportunity to leverage expertise in AI risks in the classroom.
Gensler returns to teach after four years wrestling with market oversight and crypto regulations. He is set to teach AI risks as global tech enters the race for the frontier AI.
MIT Rehires Gensler to Teach AI
The former chief at the US securities watchdog is set to teach AI research and policy, leveraging his regulatory and Wall Street experience. His spell at the MIT Sloan School of Management would bridge the regulatory experience with cutting-edge tech, per the Monday, Jan.27 statement.
Gensler transitioned from Goldman Sachs to head SEC till Jan. 20, and now to MIT grants him exposure and influence when the US tech dominance is at a crossroads. The industry faces fierce rivalry from foreign competitors, particularly China’s DeepSeek, amid regulatory fragmentation.
Before joining the SEC, Gensler taught blockchain technology in the same institution in 2018. The spell gave him insight into the blockchain’s potential and risks. His return to teaching AI is not a coincidence since five years ago, Gensler had a publication on systemic financial risks attributed to artificial intelligence.
Gensler’s Influence on Policymakers
The new role Gensler undertakes is within the academic lens. Although not as decisive as the SEC’s chair post, Gensler will retain influence given that MIT has ongoing partnerships with US-based tech firms and policymakers.
The appointment of Gensler emerged after the contentious tenure where the digital assets executives alleged he devoted a regulation-by-enforcement campaign targeting crypto firms. He steered the Commission to oversee the $120 trillion capital markets under the Biden administration.
Gensler held a firm stance on crypto, indicating that Bitcoin has unique features different from altcoins. In the twilight of the sheriff’s tenure, he distinguished Bitcoin from other crypto, citing its actual value.
Gensler informed CNBC’s “Squawk Box” that though Bitcoin is risky, it could morph into a mature asset as more financial market participants embrace it similarly to precious metals.
Gensler is set to co-direct the FinTech AI @CSAIL project undertaken by MIT’s Computer Science and Artificial Intelligence Laboratory. He would co-lead the initiative with Professor Andrew Lo, allowing the member companies to engage with MIT researchers in exploring AI technologies integration in finance.
Will Research Translate to Practical Governance?
The industry leaders decried Gensler’s tenure as shaping the digital assets policy via enforcement, not a Congress-backed rulemaking process. The regulatory agency enforced 125 actions against leading crypto firms during his tenure to earn the crypto villain title.
Beyond enforcement, Gensler’s reign is credited with the SEC approving crypto exchange-traded funds (ETFs) in 2024. The move opened up Bitcoin and Ethereum exposure to investors via the regulated instruments. It is worth mentioning that Gensler initially resisted approval of spot Bitcoin ETFs, citing investor protection and market manipulation as reasons for the delay in approval.
The opposition to the ETF approval suffered a setback when a Court of Appeals panelist ruled against the SEC in August 2023. The bench ruled in Grayscale’s favor, allowing it to convert Bitcoin Trust to the ETF. The ruling created legal pressure that saw the SEC finally approve spot Bitcoin ETFs in January of the following year.
Nobel laureate Simon Johnson joins Gensler’s return to MIT in co-teaching the course that will engage the students on various issues of essence to the global economy.
The latest development is interesting to examine if the research will translate to practical governance. Some members of the crypto community criticize the move.
Uniswap Foundation’s co-founder Devin Walsh decried the move to rehire Gensler, terming it an embarrassment for him as an MIT Sloan graduate. The executive director considers engaging Gensler to result in time, funds, and energy wastage for those studying in the hope of supporting innovative technologies.
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