One of the prominent promises of President-elect Donald Trump is to fire Gary Gensler and appoint a new chair for the U.S. Securities and Exchange Commission (SEC). This could happen as early as January 20, when Trump officially takes office.
Gary Gensler was appointed by President Joe Biden on February 3, 2021, and took office less than 11 weeks later, on April 17. If Trump fulfills his promise, he could appoint an acting chair immediately after taking office. The appointment of a new commissioner to the SEC requires Senate confirmation, and with the Republicans regaining control of the Senate after the recent presidential election, Trump's choice is likely to be approved and the new appointee could take office within a few months.
Gensler has become a controversial figure in the cryptocurrency community due to his hardline stance, arguing that current SEC regulations are sufficient to regulate the industry. However, many industry leaders, including billionaires like Winklevoss, Marc Andreessen, and Ryan Selkis, oppose this view, arguing that legal clarity is still lacking.
One of the main controversies is Gensler's view that most cryptocurrency transactions on centralized exchanges violate federal securities laws, a stance also shared by his predecessor, Jay Clayton, who was appointed under Trump. Although there has been a recent launch of spot bitcoin and ether ETFs following a legal victory for asset management firm Grayscale, much of the cryptocurrency community still believes that the SEC has not provided enough support to shape clearer regulations.
Speaking recently at NYU Law School in Manhattan in October, Gensler emphasized that his position remains unchanged, stating: "With all due respect, the most prominent figures in this field by 2024 are either in prison or awaiting extradition."
If he had known Trump's plans in advance, Gensler could have chosen to resign before Trump took office. In that case, President Joe Biden would appoint an acting chair from the remaining Democratic commissioners before Trump designated a replacement. The person nominated by Trump is likely to replace Commissioner Caroline Crenshaw, who is currently awaiting reappointment. If Gensler completely resigns, he would also need to be replaced through the Senate nomination and confirmation process.
In this context, several cryptocurrencies that the SEC has deemed unregistered securities in lawsuits against exchanges have seen price increases in recent days, including Filecoin (FIL), Algorand (ALGO), Polygon (POL), and Near (NEAR), perhaps due to expectations that the Trump administration will adopt a looser regulatory regime.
