Gensler to resign as SEC chair: What’s next under Trump?

Gary Gensler, the high-profile and often polarizing chairman of the U.S. Securities and Exchange Commission, has announced his resignation, effective the day President-elect Donald Trump takes office.

Here is X’s announcement:

I will leave my position on January 20, 2025 @SECGov Chair.

A topic 🧵⬇️

— Gary Gensler (@GaryGensler) November 21, 2024

Gensler’s decision is not unexpected for those attuned to Washington’s political rhythm. Leadership changes at federal agencies often coincide with the arrival of a new administration, especially when there is an ideological shift.

Here’s a closer look at the situation.

Gensler’s crackdown on crypto

Although Gensler’s term was planned to last until 2026, his resignation follows the unwritten rules of political transition.

Gensler’s tenure, which began in 2021 under President Joe Biden, was uneventful. Known for his bold and uncompromising regulatory stance, he has put an unprecedented crackdown on the crypto industry, which he once described as “riddled with scams and fraudsters.”

Under his leadership, the SEC took 46 enforcement actions against crypto-related entities in 2023 alone; This represents a 53% increase compared to 2022.

Some of the crypto-related lawsuits seemed reasonable. For example, the SEC’s lawsuit against Terraform Labs included allegations of a massive fraud scheme. In June, a federal jury ruled against Terraform and its co-founder, Do Kwon. They were ordered to pay over $4.5 billion in penalties, the largest penalty ever imposed in a crypto-related case.

While some applaud his efforts to bring order to the industry, Gensler’s critics often accuse him of regulatory overreach and stifling innovation, especially when it comes to lawsuits against Ripple (XRP) and Coinbase.

Trump, whose family founded a crypto startup this year, voiced his disdain for Gensler on the campaign trail and vowed to replace him “on day one.”

Dan Gallagher, Robinhood Markets’ chief legal officer, was considered as a possible replacement for Gensler but is no longer interested.

As the SEC prepares for this leadership change, the agency faces critical questions about its future direction. What does Gensler’s departure mean for financial regulation in the US? Who will take the reins and how will their approach shape the country’s financial structure?

When Gensler confirmed his resignation, social media — especially crypto enthusiasts, X’s demographic — exploded with tweets ranging from bitter anger to cautious relief.

Many in the crypto community, especially Ripple supporters, did not back down. The group known as the “XRP Army” has long blamed Gensler for the SEC’s aggressive lawsuit against Ripple Labs, which devalued XRP and engulfed the community in a years-long legal battle.

One XRP supporter tweeted: “Congratulations to the XRP Army; the moment we’ve been waiting for has arrived.”

Congratulations to the XRP army for the one wish we’ve been asking for for the last four years!

Yes, I am part of the XRP army.

— Tom Homan – Border Czar (Comments only account) (@TomHoman_) November 21, 2024

The criticism went beyond XRP, as retail investors called Gensler’s tenure “the most disruptive period in SEC history.” They describe his initial resistance to approving a Bitcoin (BTC) ETF and his handling of smaller investor disputes such as the MMTLP shareholder lawsuit.

Adding to the backlash, the same post referenced a federal judge’s reprimand of the SEC in another enforcement case, framing it as a reflection of Gensler’s heavy-handed and controversial approach.

“Thank you for protecting anyone from real fraud. “You’ve set America back years in crypto,” another social media user said.

Thank you for protecting anyone from real scams. You were a complete failure and set America back years in crypto.

— Chainlink Red Pill (@ChainlinkP) November 21, 2024

Leading names in the industry also joined the chorus of criticism. Tron (TRX) founder Justin Sun struck a harsher tone, calling Gensler’s resignation “too late” and lamenting the “huge damage” he allegedly caused to the US markets and the global economy.

It’s finally the end of an era, Gary, it’s a little late now. The damage has been done, and it is massive, hurting U.S. markets, the global economy, and ordinary people. Let’s hope the next chapter brings accountability. If you need work, contact me!

— HE Justin Sun 🍌 (@justinsuntron) 22 November 2024

After all, Gensler’s departure is not just the end of a contentious chapter; This is the beginning of a critical transition for the SEC and the industries it oversees.

Who will lead the SEC next?

With Gensler’s resignation, the focus is on who will replace him; This is a decision that could reshape the future of crypto regulation in the US.

Journalist Eleanor Terrett of Fox Business suggested that the next SEC chairman could bring a new perspective to crypto.

🚨I received new information from sources close to the transition team. @SECGov While the president will be pro-crypto, the candidate will also need to be well equipped to handle all other matters under the SEC’s jurisdiction (public companies, stock market, bond market, private funds, private funds). co/iIRrhwvSxx

— Eleanor Terrett (@EleanorTerrett) November 15, 2024

The new administration is prioritizing a candidate who is “pro-crypto” but equipped to handle the SEC’s broader responsibilities, including oversight of public companies, stock and bond markets and private funds, according to its sources.

Leading contenders include Paul Atkins, a former SEC commissioner known for his free-market philosophy and positive stance toward crypto.

Fox Business’ Charles Gasparino reports that Atkins is now seen as a pioneer with strong support from both the business and crypto communities.

SCOOP: Former SEC commissioner rumored to be a frontrunner to replace Paul Atkins @GaryGensler like @SECGov president, according to a person with direct knowledge of the matter. As with everything in Trump World, this is subject to change, of course. Fox Business previously reported…

— Charles Gasparino (@CGasparino) November 21, 2024

Atkins’ approach stands in stark contrast to Gensler’s enforcement-heavy style. Critics argue that Atkins may be too lenient, while supporters believe his leadership will encourage innovation by reducing regulatory barriers.

Another name that stands out in the competition is Robert Stebbins, partner at Willkie Farr & Gallagher and former SEC General Counsel under Jay Clayton.

Scoop: A name gaining momentum in the race @SECGov The chairman is Robert Stebbins, partner at Wilkie Farr & Gallagher and former SEC General Counsel under Jay Clayton, nominee for the U.S. Southern Attorney District. Be careful with this name.

— Charles Gasparino (@CGasparino) November 15, 2024

Stebbins is widely regarded as a stable and pragmatic candidate and offers deep legal and regulatory expertise. While his pro-crypto stance is less positive than Atkins’, his previous experience at the SEC gives him credibility with both policymakers and financial institutions.

Teresa Goody Guillén also emerges as a potential candidate. He is a veteran of the SEC and a partner at BakerHostetler, where he leads its blockchain practice.

🚨BREAKING NEWS: @realdonaldtrump The SEC is considering blockchain lawyer Teresa Goody Guillén to replace Gary Gensler as chairman.

Teresa represented several blockchain companies against the SEC during her time as co-leader of BakerHostetler’s blockchain group.

He spent time… pic.twitter.com/bg8fj8XZMS

— Dylan K (@MightyDylanK) 20 November 2024

Crypto companies are reportedly advocating for his candidacy and are confident that his dual experience as an SEC employee and blockchain advocate will bring a balanced perspective to the job.

Former Acting Comptroller of the Currency Brian Brooks is another prominent figure who has held key financial regulatory positions, including chairman of the SEC.

🚨NEW: FOX Business learns former OCC Acting Director during Trump administration @BrianBrooksUS He is on shortlists for “various financial agency roles outside the CFTC,” according to a source close to him.

Apart from the CFTC, some of the other financial regulatory agencies…

— Eleanor Terrett (@EleanorTerrett) 18 November 2024

Brooks, who was dubbed the “Crypto Controller” for his blockchain-friendly policies during his tenure at the OCC, has been a vocal advocate for integrating crypto into mainstream banking.

While Terrett noted that Brooks is being considered for multiple roles outside the SEC, his appointment there could mark a transformative era for crypto regulation.

Interestingly, concussion may not be limited to the SEC. Terrett suggests that the Trump administration’s Commodity Futures Trading Commission is exploring an expanded role in crypto oversight.

Such a move could involve splitting regulatory responsibilities between the SEC and CFTC, or even delegating primary authority entirely to the CFTC.

But as Terrett points out, this shift would require a massive increase in funding for the CFTC, which currently does not have the resources to administer such a broad jurisdiction. For now, speculation continues.

Preparing for change

Gensler’s resignation has crypto industry insiders speculating about what lies ahead, with many experts pointing to a mix of challenges and opportunities.

In a conversation with crypto.news, AMLBot CEO Slava Demchuk spoke about one of the most pressing issues: the lack of clear rules for crypto in the US, especially when compared to the EU’s Markets for Crypto-Assets Regulation.

“Without clear regulations, crypto companies cannot fully understand compliance requirements or attract large institutional players.”

One particularly challenging issue is the struggle of crypto companies to access banking services. AMLBot Legal Manager Niko Demchuk talked about how banks in the US are hesitant to work with crypto companies due to the risk of regulatory impacts.

“Banks do not want to partner with companies that do not comply with the rules. “Even indirect links to cryptocurrency could bring scrutiny or penalties, create bottlenecks for the industry, and make it harder for businesses to carry out their day-to-day financial transactions.”

If the next president adopts a more crypto-friendly stance, there is potential for significant improvements, including clearer regulations, better access to banking, and a more welcoming environment for innovation.

The possibility of a regulatory framework similar to the EU’s MiCA is also gaining traction. Experts believe such a framework could bring greater consistency to the US market by addressing issues such as cybersecurity, anti-money laundering and market manipulation.

For cryptocurrency companies, this transition period is an opportunity to move forward and focus on strengthening compliance systems, improving know-your-customer processes, and investing in tools such as transaction monitoring.

“Businesses need to be proactive. Regulatory changes are coming, and those who are prepared will have a smoother adjustment,” Demchuk added.

Now is the time for crypto companies to take action; because what comes next could reshape the future of the crypto industry in the US and around the world.