Countdown to Gary Gensler's resignation? Who will be the next SEC leader?

Author: Azuma, Odaily Planet Daily

On July 22, several institutions and media, including 10x Research, predicted that with Biden's withdrawal from the election, the current Chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, is expected to resign in early 2025.

Since taking office as SEC Chairman in April 2021, Gensler has served more than half of his term. During his tenure, Gensler has frequently "attacked" the cryptocurrency industry, leading cases against many well-known crypto companies such as Binance, Coinbase, Kraken, and FTX, and has made strong regulatory statements such as "the vast majority of tokens in the crypto market are securities, so the issuance and sale of these securities-like crypto tokens will be regulated by securities laws."

Because of this, Gensler has long been viewed as the "public enemy number one" on the regulatory side, and with news of Gensler potentially resigning early, the cryptocurrency industry has begun to anticipate a more friendly figure to take the helm of the SEC, thereby providing a more lenient growth environment for the industry.

Will Gensler Resign Early?

In terms of tenure, Gensler's term was supposed to last until 2026, but it has become customary for SEC chairmen to resign when there is a change in government.

George W. Bush appointed Christopher Cox as SEC Chairman, serving from August 2005 to January 2009, but when Obama took office, Cox quickly chose to resign.

Obama's chosen SEC Chairman, Mary Jo White, had a set term from April 2013 to January 2017, but when Trump was elected president for the first time, she also submitted her resignation in November 2016.

Regarding whether Gensler will resign early, Hester Peirce, one of the five current SEC commissioners (and also a popular successor candidate, as discussed below), recently hinted at this possibility in an interview: "If there is a change in the presidency, the SEC Chairman usually changes as well."

However, Peirce did not make any predictions about potential successors but emphasized that the new president will have ample discretion in choosing the next chairman.

Considering that Biden has already withdrawn from the election and a change in the White House is a foregone conclusion, especially given that the current Republican presidential candidate Trump is significantly leading in the probability of being elected, and that Trump's chosen running mate, J.D. Vance, has publicly criticized Gensler's work, if Trump successfully takes office, Gensler will face tremendous political pressure.

In contrast, if the currently clearly lagging Democrats can successfully hold their ground, the probability of Gensler continuing to serve should be slightly higher, but it cannot be ruled out that Harris or other presidential candidates (the Democrats have not yet determined their presidential candidate, but Harris has a higher probability) might replace the widely disliked Gensler in order to attract more "allies."

Who Might Succeed Him?

As rumors of Gensler potentially resigning early circulate, speculation about potential successors is also increasing.

CNBC recently reported that some cryptocurrency investors have submitted several names to Trump as potential successors to Gensler, including J. Christopher Giancarlo and Heath Tarbert, both former chairmen of the Commodity Futures Trading Commission (CFTC) during Trump's first term, current Robinhood Chief Legal Officer and former SEC commissioner Dan Gallagher, and Paul Atkins, who served as an SEC commissioner during the Bush administration.

J. Christopher Giancarlo

For the "old-timers" in the cryptocurrency industry, the names J. Christopher Giancarlo and Heath Tarbert may not be unfamiliar, especially Giancarlo, who has been praised by the industry as "CryptoDad."

Giancarlo himself not only held a relatively friendly attitude towards cryptocurrencies during his tenure at the CFTC but also wrote a book titled "CryptoDad: The Fight for the Future of Money" after leaving, detailing his story of opening the green light for compliant Bitcoin futures during his term.

It is worth mentioning that after leaving office, Giancarlo joined several industry companies, serving as a director at Paxos and as chairman of the advisory board at Polymarket.

Heath Tarbert

Heath Tarbert is Giancarlo's successor at the CFTC and, like Giancarlo, is also a well-known supporter of cryptocurrencies.

During his tenure at the CFTC, Tarbert led the listing of compliant Ethereum futures and Bitcoin options products, and he has publicly stated that "U.S. regulation is lagging behind the development of cryptocurrencies and blockchain" and that "the concept of DeFi is revolutionary." After leaving, Tarbert joined Circle as Chief Legal Officer.

Dan Gallagher

Dan Gallagher is currently the Chief Legal Officer at Robinhood, which is now one of the companies most involved in cryptocurrency in Web2. In 2022, Gallagher publicly stated, "Do not over-regulate the cryptocurrency industry, as this could stifle innovation."

Gallagher is also one of the few potential successors who has responded to the succession matter; in a statement to CNBC, Gallagher expressed his honor at being nominated as SEC Chairman under the Trump administration.

Paul Atkins

Compared to the previous few, Paul Atkins has made relatively few explicit statements about cryptocurrencies, but he has publicly criticized the SEC for its excessive regulation of the cryptocurrency industry.

In an interview with CNBC regarding SEC issues, Atkins stated, "It's a mess over there… I think there is a lot of work to be done, and the approach must change."

Atkins added that he has not heard from Trump or his team about what role he might play at the agency, but when asked if he would accept a position at the SEC if Trump won, Atkins replied, "Who knows?"

Hester Peirce

In addition to the four individuals reported by CNBC, current SEC Republican Commissioner Hester Peirce is also seen as a popular candidate to succeed Gensler, at least as an acting chairperson after Gensler's departure.

In stark contrast to Gensler, Peirce can be viewed as the "best ally" for the cryptocurrency industry on the regulatory side. In almost all of the regulatory dynamics regarding cryptocurrencies that you can remember, including ETFs, SAB-121, and multiple lawsuits, Peirce has consistently stood on the side supporting cryptocurrencies.

Due to her long-standing friendly attitude towards cryptocurrencies, Peirce has been given a kind nickname, CryptoMom—though she recently responded by saying, "I'm not your mom…"

Although Peirce has not directly responded to the possibility of succeeding as SEC Chairman, she has received support from some congressional forces. Congressman French Hill, who is running for chair of the House Financial Services Committee, recently stated in an interview, "I'm not sure about Peirce's own willingness, but I think she is an excellent candidate to lead the SEC; she could be a great chair."

A Regulatory Spring for Cryptocurrencies

In summary, Gensler's early resignation seems to be a high-probability event, and from the perspective of potential successors, the names currently reported by the media are all relatively friendly towards cryptocurrencies.

For the cryptocurrency industry, which has long suffered from regulatory troubles, the next few years may be the most lenient growth environment in the industry's history—although this "honeymoon period," somewhat related to garnering votes, is itself somewhat fragile.

Idealists who believe in decentralization may complain that relying on the current political environment is not what Satoshi envisioned when he wrote the Bitcoin white paper, but from a realist perspective, this upcoming regulatory spring may be the best opportunity for all parties in the industry to seek development.