Gary Gensler's Ex-SEC Colleague Says Restrictive Crypto Regulation Is Like 'Stifling Electricity Because Of A Stake In Oil Lamps'

Former SEC lawyer and lead tech analyst at I/O Fund, Beth Kindig, on Wednesday equated restrictive policies on crypto to historic attempts at holding back major advancements, likening it to “stifling electricity because they had a stake in oil lamps.”

What Happened: In an interview with Fox Business on Wednesday, Kindig suggested that regulatory resistance reflects “self-serving motives” rather than an informed view of the industry's potential for innovation.

Kindig pointed to the significant surge in political spending by the crypto industry as an effort to protect innovation, with donations reaching an all-time high in the 2024 U.S. election cycle.

According to recent Federal Election Commission filings, crypto companies have contributed over $200 million, making the industry the largest corporate donor for the election.

"The crypto community is saying, let's focus on policy… let's get some money and let's back the right candidate," Kindig said, referring to an industry push to support political figures who are open to pro-crypto policies.

Among the largest beneficiaries of this influx are Vice President Kamala Harris and former President Donald Trump.

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Top crypto figures such as Ripple's Chris Larsen and Coinbase backer Vinod Khosla have supported Harris's campaign, while Trump has received backing from Tether advocate Howard Lutnick and the Winklevoss twins.

Political action committees (PACs) have also amplified the industry's voice, with crypto-backed PACs like Future Forward raising substantial funds for Harris's campaign, while a Trump-affiliated super PAC reportedly raised over $7.5 million in crypto donations.

Despite this growing influence, Kindig remains critical of the government's current stance on crypto.

"The government is trying to stifle innovation," she emphasized, calling for clear and constructive policy decisions.

She warned that failing to address the regulatory climate could slow technological adoption and limit American leadership in the financial sector.

What’s Next: The importance of crypto's role in the U.S. financial landscape will be a focal topic at Benzinga's Future of Digital Assets event on Nov. 19, where industry leaders are expected to discuss crypto regulation, innovation, and policy trends.

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