Emily Walker
As Donald Trump prepares to assume the presidency on January 20, Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), is advocating for a clear regulatory structure for the cryptocurrency market.
With the incoming Trump administration expected to support digital assets, Gensler’s remarks come at a crucial time for the regulation of cryptocurrencies in the United States.
Gensler Calls for Definitive Crypto Regulations
According to a Bloomberg report, Gensler spoke at a legal conference in New York where he stressed the need for clear “rules of the road” for cryptocurrency transactions and the roles of brokers and exchanges.
He highlighted the necessity for transparency and adequate disclosure, drawing from historical lessons of the Great Depression, which demonstrated the risks of insufficient investor information.
Although Gensler noted that Bitcoin is not categorized as a security, he referred to the SEC’s “legal victories” regarding crypto-related investment products.
The SEC Chairman remarked that courts have consistently affirmed the SEC’s jurisdiction to enforce regulations on securities, irrespective of their format.
This viewpoint, though, might contrast with the new Republican administration’s approach to the cryptocurrency sector, which may not share Gensler’s emphasis on compliance with traditional securities laws.
Challenges for Trump’s Plans Regarding Gensler
Trump’s strategy aims to foster a supportive regulatory environment for cryptocurrencies and establish a strategic Bitcoin reserve, intending to make the US a leading center for digital assets.
This change follows substantial financial backing from cryptocurrency firms during the campaign, including support from prominent figures like the Winklevoss twins and Kraken’s CEO, alongside Trump’s enthusiastic endorsement, which significantly altered the 47th president’s outlook on the sector.
However, one of Trump’s major promises is to dismiss Gensler on the first day of his administration, which is just over two months away.
As per Bitrabo, Trump is evaluating potential successors for Gensler, including Dan Gallagher, Chief Legal Officer of the US-based exchange Robinhood, and SEC Commissioner Hester Peirce, who has been an outspoken proponent of cryptocurrency.
Peirce has frequently criticized the SEC’s regulatory approach in President Biden’s tenure, echoed by Commissioner Mark Uyeda, particularly over the past year as the Commission has intensified its scrutiny of market players.
Moreover, Bloomberg indicates that the Heritage Foundation’s Project 2025 is dedicated to curtailing the SEC’s size and power, hinting at a potential shift in regulatory oversight.
Nevertheless, changing the SEC chair may not be a simple process. Previous reports suggest that the SEC functions as an independent federal agency, with commissioners and the chair protected from arbitrary dismissal.
Ultimately, it remains uncertain how Trump’s actions will unfold and whether Congress, now controlled by the Republican Party due to recent elections, will need to intervene for a smooth transition or if Gensler will opt to resign.
Featured image from DALL-E, chart from TradingView.com