Donald Trump seems ready to pick Dan Gallagher, Robinhood’s Chief Legal Officer, as his choice to replace Gary Gensler as head of the Securities and Exchange Commission (SEC) if he makes a return to the Oval.
Gallagher, who has history at the SEC as a former commissioner, is already a leading contender according to insiders like former regulators and lobbyists.
He’s got a background that fits right into Trump’s agenda, and people familiar with his work are already speculating that he’s a “natural choice.”
Interestingly, it comes at a time when Gensler is eyeing a lawsuit against Robinhood.
They’re looking at the firm’s crypto business, questioning whether Robinhood is acting as an unregistered broker-dealer and clearing agency in the crypto market.
If the SEC does go ahead with the charges, Gallagher might find himself at the center of a very awkward legal fight.
Gallagher on the SEC’s crypto crackdown
Gallagher believes the SEC’s potential case against Robinhood is weak. “It’s a dog of a case,” he said.
While some platforms are knee-deep in crypto, listing hundreds of tokens, Robinhood’s approach has been more conservative.
Gallagher points out that Robinhood doesn’t even offer crypto lending or staking products, something that other firms are all over.
According to him, the company has deliberately avoided going “hog wild” with crypto listings, which he believes should set them apart for the SEC.
“We’ve been forgoing revenue for the company by not going hog wild listing coins, and I think that puts us in a very, very unique position. Shooting at the good guys is a really bad policy.”
The SEC did not respond to Cryptopolitan’s request for comments.
Trump’s revolving door of regulators
This situation isn’t anything new. Eight years ago, Trump’s administration saw a wave of financial, corporate, and legal figures trying to join his team.
The same revolving door between the government and private industry is expected to start spinning again if Trump wins the next election. Gallagher’s candidacy is a prime example of this.
Richard Painter, the former ethics lawyer under President George W. Bush, summed it up like this:
“This is the name of the game: Get the fox in the henhouse.”
But Gallagher’s not the only name being tossed around for the role. Other possible candidates are former Commodity Futures Trading Commission Chair Chris Giancarlo, also known as “CryptoDad,” and former SEC General Counsel Robert Stebbins.
Current SEC Commissioner Hester Peirce is also e in the mix. But Gallagher’s history with the SEC makes him a front-runner in the eyes of Republicans.
“Dan would be great,” said Rep. Bill Huizenga, a Michigan Republican.
Huizenga has worked with Gallagher on various financial services hearings and believes he’s the right person for the job, even though they’ve disagreed on certain issues in the past. He added that:
“You want someone who’s thoughtful, experienced, and not just ideologically politically driven. That’s been, I think, the problem with Gensler.”
While at the SEC, Gallagher pushed back against some of the rules put in place after the 2008 financial crisis.
He called for a thorough review of U.S. stock market trading and raised concerns early on about the SEC’s internal courts.
If Trump does pick Gallagher, he’ll be walking into a storm. Robinhood has been under fire from lawmakers for years.
The GameStop saga of 2021, where Robinhood had to stop investors from buying more stock in the video game retailer, is still fresh in people’s minds.
Congress wasn’t happy about that, and neither were the millions of retail investors who felt shut out of the market.
Vlad and Baiju did their best to fix things, but it was a little too late. Democrats don’t care much for Gallagher though.
Meanwhile, he publicly claimed that Robinhood has made big changes since the GameStop incident. He says the company has overhauled its compliance and risk management systems.
He’s also dismissive of the idea that his transition from the private sector back to government would be a problem, saying that having experience in both areas is an asset, not a conflict of interest.
It’s still unclear whether Gallagher even wants to leave Robinhood. He’s said that he loves his job there and considers it an honor to even be mentioned in the conversation for SEC chair.
But there’s no doubt that Gallagher has strong opinions about the SEC’s current direction, particularly when it comes to crypto.
Gallagher has said that if he had been the SEC chair over the last few years, there would already be rules in place to guide the industry.
He believes it needs a clear path for registration and regulation, something that hasn’t happened under Gensler’s leadership. “I would have done things differently,” he said.