Bitrabo Editorial
During the recent 2024 Bitcoin Conference in Nashville, former President Donald Trump caused a stir by declaring his intention to “make crypto great again,” which involved removing the Securities and Exchange Commission (SEC) Chair on his initial day back in office.
While Trump’s vow to replace the crypto-skeptic Gary Gensler resonated with many in the cryptocurrency industry dissatisfied with the SEC’s enforcement strategies for regulating cryptocurrencies, closer examination reveals potential impediments to fulfilling Trump’s promise.
Restrictions and Realities
As per a Fortune report, the SEC functions as an independent federal agency, with commissioners, including the chair, shielded by safeguards that prevent arbitrary dismissal.
These protections maintain the agency’s independence from political influences, ensuring that regulatory decisions are based on legal and policy considerations rather than external pressures.
Guided by legislations and legal precedents, most notably the 1935 Supreme Court case of Humphrey’s Executor v. United States, a president’s authority to remove commissioners of independent agencies without cause is limited.
Additionally, political dynamics play a role, where although the Senate confirms the appointment of the SEC chairman, removal typically does not mandate Senate approval.
Nonetheless, any sudden move to dismiss Gensler might trigger opposition in Congress and establish a risky precedent.
The Challenge of Appointing a Pro-Crypto SEC Chair
Despite demands from various sectors, including influential figures in the cryptocurrency industry and senior politicians like Senator Warren Davidson, for Gensler to resign due to perceived deficiencies in handling crypto matters, the process of his removal is far from immediate.
Hence, unless an unforeseen resignation by the anti-crypto chair occurs, the likelihood of Gensler’s departure involves a lengthy and careful procedure, as noted in Fortune’s analysis.
This is not to say that avenues to potentially replace Gensler do not exist. If the administration can present a credible case of “inefficiency, neglect of duty, or malfeasance”—such as pointing to the SEC’s legal setbacks like the high-profile Ripple case—the President could trigger formal removal procedures.
Nevertheless, even in such a scenario, the process would be time-consuming. Experts suggest that the entire succession of steps, from initial intent to final resolution, could range from six months to over a year, likely exceeding Gensler’s remaining tenure.
Featured image from DALL-E, chart from TradingView.com