The rumors have been confirmed—SEC Chair Gary Gensler will step down from his role at the SEC in two months. For many, if not most in the cryptocurrency community, Gensler’s departure means the SEC’s “war” on the whole industry will soon come to an end.
SEC Chairman will be leaving the U.S. securities agency on January 20, 2025.
According to Katrina Paglia, chief legal officer at Pantera, many ongoing securities lawsuits against U.S. crypto businesses will probably fade away once the SEC Chair officially resigns.
Paglia, speaking during a recent panel at the North American Blockchain Summit in Texas, predicted that the SEC will likely choose “settlements,” rather than following through on ongoing cases. She suggested that defendants might agree to pay penalties to settle the cases.
“They’re going to quietly go away. The defendants will pay something,” Paglia said.
See You Later Gary
While the odds of withdrawal are higher with Gensler’s exit, it’s unlikely that the SEC will choose to go down this way. Paglia said the Commission may opt for subtle resolutions.
Under Gensler’s tenure, the SEC has initiated a long list of legal enforcement against cryptocurrency businesses, including major entities like Ripple Labs, Binance, Coinbase, or Kraken.
The queue of companies threatened by the SEC’s Wells notice is longer. Some known names that have been associated with warnings from the SEC are Consensys, Robinhood Crypto, Uniswap Labs, OpenSea, and Crypto.com.
Pantera’s legal boss said she was hopeful that the SEC might issue no-action letters after Gensler’s term ends, which could help reduce litigation burdens.
The widespread anticipation is that the new SEC leadership will take a different approach, which could be less tough and focused on clear guidance.
Following Donald Trump’s presidential victory, a number of names have been brought forward as potential candidates for the SEC Chair position. These include Robinhood’s chief legal officer Dan Gallagher, former Binance.US CEO Brian Brooks, and SEC commissioners Hester Pierce and Mark Uyeda.
According to the latest update, Trump is considering appointing Teresa Goody Guillén, a respected blockchain lawyer and former SEC attorney, to be the new SEC chair. Guillén’s stance toward crypto is reportedly more lenient compared to Gensler’s.
SEC Commissioner Hester Peirce may take over crypto matters within the agency until a new chair is appointed. Peirce is known for her supportive stance on the cryptocurrency industry.
Having advocated for clear regulatory frameworks that promote innovation while ensuring investor protection, many expected Peirce to lead the SEC. However, her plan is to leave the agency after her term ends.
Ripple Gets The Upper Hand
The news of Gensler’s resignation is not unexpected; indeed, crypto community members detected hints that he was saying farewell last week. Among the companies currently embroiled in legal battles with the SEC, Ripple Labs could stand to benefit the most from his departure.
Data from CoinGecko shows that speculation about Gensler’s resignation sent XRP rocketing past the $1 mark for the first time since November 2021. The cryptocurrency soared 25% to a high of $1.42 on Friday after Gensler confirmed his leaving.
XRP is now trading at around $1.37, recording 71% weekly growth. Year-to-date, it has shot up 130%, outperforming many other cryptocurrencies.
Yet, whether XRP will maintain its bullish momentum in the short term will depend on the SEC vs. Ripple lawsuit. The closure of this lawsuit may prompt the SEC to clarify its stance on cryptocurrency.
In the long run, market participants lean towards the potential launch of an XRP ETF in the US. Two spot XRP ETF proposals filed by Bitwise and Canary Capital are currently under review by the SEC.
Yesterday, WisdomTree debuted its physical XRP ETP in Europe. The fund, providing investors with direct exposure to the spot price of XRP, is expected to pave the way for similar funds to launch in the US.
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