Operation Tame Finance

GARY GENSLER’S students at MIT Sloan were an appreciative bunch. Their nominations secured him the business school’s “Outstanding Teacher” award for the 2018-19 academic year. Now that he is the chairman of the Securities and Exchange Commission (SEC), America’s main markets watchdog, his constituents are rather more unruly. Finance has been upended by an explosion of raucous innovation, and Mr Gensler has to work out how, and to what extent, to police it all. Forget diligent undergraduates; it is rather like trying to run the world’s largest, noisiest kindergarten.

The drive for more adult supervision is already under way in crypto. The SEC recently threatened to sue Coinbase, a large cryptocurrency exchange, if it launches a lending product without first registering it as a security. And this week the regulator extracted $539m from three media firms charged with illegal offerings of stocks and digital assets.

Crypto-believers may have expected a friendlier stance from a man whose courses at MIT included one on the uses of blockchain technology. But since taking the SEC’s reins Mr Gensler has been at pains to point out that, while he is “neutral” on technology, he is anything but when it comes to investor protection and market stability. And that means beefing up regulation of the $2.2trn crypto market, which, he told...