The blockchain advocacy group CEDAR Innovation Foundation (CIF) has called for the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, to resign. In a statement on November 18, the group accused Gensler of disregarding tradition by refusing to announce his resignation.
According to CIF, Gensler is trying to hold onto power tightly, which is contrary to previous officials who often resigned when a new administration took office. The decision to bypass this precedent reflects his unwillingness to accept change.
The last three SEC chairmen resigned within 2-3 weeks after the election. Mary Schapiro, appointed by President Barack Obama, announced her resignation on November 26, 2012, and officially left office on December 14, 2012. Similarly, Mary Jo White also resigned on January 20, 2017, after announcing this decision on November 14, 2016, just weeks after Donald Trump's electoral victory.
Even Chairman Jay Clayton, appointed by Trump, announced his resignation on November 16 after Trump lost to Joe Biden and left on December 23. This group is now calling for Gensler to immediately follow suit by announcing his resignation and leaving his position. CIF wrote:
"While all three of his predecessors respected this process by announcing their intention to resign immediately, Gensler remains entrenched in his position, despite tradition and accountability."
The group also noted that they are not the only ones calling for Gensler to resign. Several other groups such as the Securities Industry Association and Consumers for a Strong Economy, as well as individuals like former SEC official John Reed Stark and billionaire investor Mark Cuban, have also called for Gensler to resign.
Will Gensler resign?
Despite calls from many sides, it is still unclear if Gensler intends to leave this position. However, there are signs that he might, with industry observers pointing out hints in his public statements.
In a recent speech at the Practicing Law Institute program, Gensler discussed the challenges and achievements of his administration, including how his agency handles the crypto industry. He also hinted at leaving, noting that he would let others handle the remaining regulations.
Many believe this speech signifies a farewell, especially after he also stated that he is on a tour to build his legacy.
Many in the crypto community believe his legacy will be historic. A group of retail investors recently wrote an open letter to Gensler, mocking that his term will be recorded as one of the worst in recent financial history.
The letter highlights several cases they consider Gensler's SEC record, including the Ripple case and the Debt Box case. The letter describes it as an unforgettable term marked by "arrogance, incompetence, and a crusade obsessed with stifling innovation."
"He embodies everything wrong with unchecked regulatory power, leaving behind a legacy of broken trust and billions in lost value."
Others seem to share this view. CIF also criticized Gensler's legacy tour and noted that he doesn't need that tour, he just needs to resign.
Who will replace Gensler?
So who will replace Gensler? While some names have been mentioned, there are no official nominations. Potential options include Robinhood's legal director Dan Gallagher and former Comptroller of the Currency Brian Brooks. Former SEC commissioner Paul Atkins and current commissioners Hester Pierce and Mark Uyeda have also been mentioned.
However, according to market predictions, Brooks currently has the highest selection odds. Kalshi believes Brooks has a 48% chance of being chosen, Gallagher has a 25% chance, and Uyeda only has 5%. However, it is still too early to say who will take this position, although everyone believes it will be a crypto-friendly term.
Gensler's delay in announcing his resignation may be the reason Trump has not nominated a chosen person for that position. Although Trump promised to fire Gensler on his first day in office, the U.S. president only has the legal authority to remove the SEC chairman for incompetence, neglect of duty, and misconduct.
However, the president could downgrade Gensler to commissioner and replace him with another commissioner until his term officially ends in June 2026.
