Gary Gensler, the high-profile and often polarizing chair of the U.S. Securities and Exchange Commission, announced his resignation, effective the day President-elect Donald Trump takes office.
Hereâs the announcement on X:
Genslerâs decision is hardly unexpected for those attuned to Washingtonâs political rhythms. Leadership changes at federal agencies often coincide with the arrival of a new administration, especially when thereâs an ideological shift.Â
Hereâs a closer look at the situation.
Genslerâs crackdown on crypto
Although Genslerâs term was slated to run through 2026, his resignation aligns with these unwritten rules of political transitions.
Genslerâs tenure, which began in 2021 under President Joe Biden, has been anything but uneventful. Known for his bold and uncompromising regulatory stance, he led an unprecedented crackdown on the crypto industryâa sector he once described as ârife with fraud and hucksters.â
Under his leadership, the SEC initiated a record 46 enforcement actions against crypto-related entities in 2023 alone, a 53% increase from 2022.Â
Some of the crypto-related lawsuits filed seemed reasonable. For example, the SECâs case against Terraform Labs involved 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 ever imposed in a crypto-related case.
While some applauded his efforts to bring order to the industry, Genslerâs critics often accuse him of regulatory overreach and stifling innovation, particularly when it comes to cases against Ripple (XRP) and Coinbase.
Trump, whose family launched a crypto startup this year, vocalized his disdain for Gensler on the campaign trail and pledged to replace him âon day one.â
Dan Gallagher, Robinhood Marketsâ chief legal officer, was considered a possible replacement for Gensler, but he is no longer interested.
As the SEC prepares for this leadership change, the agency faces critical questions about its future direction. What does Genslerâs departure mean for financial regulation in the U.S.? Who will take the reins, and how will their approach shape the nationâs financial landscape?
When Gensler confirmed his resignation, social media â particularly crypto enthusiasts populating X â erupted with tweets that ranged from bitter resentment to cautious relief.Â
Many within the crypto community didnât hold back, particularly supporters of Ripple. Known as the âXRP Army,â they had long blamed Gensler for the SECâs aggressive lawsuit against Ripple Labs, which tanked the value of XRP and dragged the community into a years-long legal battle.Â
âCongratulations to the XRP Armyâthis is the moment weâve been waiting for,â one XRP supporter tweeted.
Criticism extended beyond XRP, with retail investors calling Genslerâs tenure âthe most destructive period in SEC history.â They cite his initial resistance to approving a Bitcoin (BTC) ETF and his handling of smaller investor disputes, such as the MMTLP stockholder case.
Adding to the backlash, the same post referenced a federal judgeâs reported reprimand of the SEC in another enforcement case, framing it as a reflection of Genslerâs heavy-handed and controversial approach.Â
âThank you for protecting no one from actual scams. You set America back years in crypto,â another social media user quipped.
High-profile industry figures also joined the chorus of criticism. Justin Sun, the founder of Tron (TRX), took a harsher tone, calling Genslerâs resignation âtoo lateâ and lamenting the âmassive damageâ he allegedly inflicted on U.S. markets and the global economy.
In the end, Genslerâs exit isnât just the close of a contentious chapter; itâs the start of a critical transition for the SEC and the industries it oversees.
Who will lead the SEC next?
With Genslerâs resignation, the focus is shifting to who will succeed himâa decision that could reshape the future of crypto regulation in the U.S.
Journalist Eleanor Terrett of Fox Business has suggested that the next SEC chair may bring a fresh outlook on crypto.Â
According to her sources, the incoming administration is prioritizing a candidate who is âpro-cryptoâ yet equipped to handle the SECâs broader responsibilities, including oversight of public companies, stock and bond markets, and private funds.
Among the leading contenders is Paul Atkins, a former SEC commissioner known for his free-market philosophy and favorable stance on crypto.Â
Charles Gasparino of Fox Business reported that Atkins is currently viewed as a frontrunner, buoyed by strong support from both the business and crypto communities.Â
Atkinsâ approach stands in stark contrast to Genslerâs enforcement-heavy style. While critics argue that Atkins may be too lenient, his supporters believe his leadership would promote innovation by lowering regulatory barriers.
Another prominent name in the running is Robert Stebbins, a partner at Willkie Farr & Gallagher and former SEC General Counsel under Jay Clayton.Â
Stebbins is widely regarded as a steady and pragmatic candidate, offering deep legal and regulatory expertise. While his pro-crypto stance is less favorable than Atkinsâ, his previous experience at the SEC gives him credibility with both policymakers and financial institutions.
Teresa Goody GuillĂŠn is also emerging as a potential candidate. A veteran of the SEC and a partner at BakerHostetler, where she co-leads the blockchain practice.Â
Crypto companies are reportedly advocating for her nomination, confident that her dual experience as an SEC insider and blockchain advocate would bring a balanced perspective to the role.
Brian Brooks, the former Acting Comptroller of the Currency, is another notable name being floated for key financial regulatory positions, including the SEC chair.Â
Dubbed the âCrypto Comptrollerâ for his blockchain-friendly policies during his tenure at the OCC, Brooks has been a vocal proponent of integrating crypto into mainstream banking.Â
While Terrett noted that Brooks is under consideration for multiple roles beyond the SEC, his appointment here could signal a transformative period for crypto regulation.
Interestingly, the shakeup may not be limited to the SEC. Terrett suggests that the Trump administration is exploring an expanded role for the Commodity Futures Trading Commission in crypto oversight.Â
Such a move could involve splitting regulatory responsibilities between the SEC and CFTCâor even transferring primary authority to the CFTC entirely.Â
However, as Terrett pointed out, this shift would require a colossal increase in funding for the CFTC, which currently lacks the resources to manage such an expansive mandate. For now, speculation continues.
Preparing for the change
Genslerâs resignation has left crypto industry insiders speculating about what lies ahead, with many experts pointing to a mix of challenges and opportunities.Â
Slava Demchuk, CEO of AMLBot, in a conversation with crypto.news talked about one of the most pressing issues: the lack of clear rules for crypto in the U.S., especially compared to the EUâs Markets in Crypto-Assets Regulation.Â
âWithout clear regulations, crypto companies have been left in limbo, unable to fully understand compliance requirements or attract major institutional players.â
One particularly thorny problem is crypto companiesâ struggles to access banking services. Niko Demchuk, Head of Legal at AMLBot, described how banks in the U.S. are often hesitant to work with crypto firms due to the risk of regulatory fallout.Â
âBanks donât want to associate with companies that might be out of compliance. Even indirect ties to crypto can bring scrutiny or fines, creating bottlenecks for the industry, making it difficult for businesses to perform everyday financial operations.â
If the next chair adopts a more crypto-friendly stance, thereâs potential for key improvements, including clearer regulations, better access to banking, and a more welcoming environment for innovation.Â
The prospect of a regulatory framework similar to the EUâs MiCA is also gaining traction. Experts believe that such a framework could bring greater consistency to the U.S. market, addressing issues like cybersecurity, anti-money laundering, and market manipulation.Â
For crypto companies, this transitional period is an opportunity to get ahead and focus on strengthening compliance systems, enhancing know-your-customer processes, and investing in tools like transaction monitoring.Â
âBusinesses need to be proactive. Regulatory changes are coming, and those who are prepared will have a smoother adjustment,â Demchuk added.
For crypto firms, the time to act is nowâbecause what comes next could reshape the future of the crypto industry in the U.S. and across the globe.