What Gary Gensler Could Still Do Against Crypto in His Remaining Days as SEC Chair – Unchained

The highly unpopular agency chief retains the ability to take various measures, but they can be easily reversed, sources say.

After Donald Trump achieved a decisive victory in the US presidential election, the virtual currency market rallied. Investors are self-proclaimed The “cryptocurrency president” will lead the country for the next four years, supported By the Republican Senate and possibly the Republican House. Politically speaking, the biggest remaining concern in the crypto community right now is what SEC Chairman Gary Gensler will do in the remaining 75 days before President Trump takes office on January 20th.

The next president is promised Gensler is expected to be fired immediately after taking office, but it remains to be seen by political experts as to whether this will motivate Gensler to wreak havoc on the crypto industry while he leaves office, or whether he will lay down his weapons. Opinions are divided between the two. Experts agree that whoever Mr. Trump chooses to replace Mr. Gensler will have the power to halt ongoing investigations, litigation, and even new rulemaking processes once appointed. is.

“Any enforcement action he initiates could be reversed,” said Jonathan Padilla, CEO of Snickerdoodle Labs, a Web3 marketing tool working within the Democratic Party. The SEC's new rules could also be overridden next year by a particularly crypto-friendly U.S. Congress, a new speaker, or new legislation. “Essentially, within 100 days, we can put everything back together,” Padilla said.

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Despite President Trump's repeated promises to “fire” Gensler on the first day of his new administration, citing his often hostile stance toward the crypto industry and “regulation-by-enforcement” approach, Trump It probably won't be possible to completely legally remove Mr. Gensler from the committee. However, it is possible to be demoted to commissioner, which would have significantly less power. The SEC Chairman, who is appointed by the President, also typically: resign With the new administration in place, an SEC spokesperson declined to comment when Fox News personality Eleanor Terret asked about Gensler's plans on Wednesday. remove So did Trump himself before he took office.

The commission did not immediately respond to questions on the matter.

What is Gensler? It was done do

The likelihood that President Trump will replace Mr. Gensler with someone with very different views could prompt Mr. Gensler to do whatever he can to rein in the industry in his final days, the industry said. Some officials have issued public warnings. “When new leadership takes over a federal agency, there will be immediate and significant changes in crypto policy,” said Jake Cherbinski, chief legal officer at Valiant Fund. said At X on Wednesday morning. “Between now and then, the outgoing administration may be busy finalizing regulations and filing enforcement actions.”

Others like Padilla speculate that Gensler will likely live out his final days quietly. A person familiar with the SEC's internal dynamics suggested that Mr. Gensler's staff could “walk the walk” over any actions he wanted to take, making it more difficult for Mr. Gensler to influence.

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If Gensler chooses to take the plunge, he has a few options. For example, he could unilaterally launch new investigations into companies he believes violate securities laws, which could be uncovered through new Wells notices or subpoenas. . If Gensler can get other Democratic appointees on the committee to go along, companies that have already received Wells notices, including crypto gaming company Immutable, NFT platform OpenSea, and stock and crypto trading platform Robinhood. There is also the possibility of filing a lawsuit. ,.

But Gensler has enough time by January 20 to resolve new legal battles or finalize new rulemakings, as both processes typically take several months to complete. There is no. The new SEC Chairman would then have the power to put such litigation on hold while the Commission proceeds with its rulemaking, or to dismiss the case altogether.

Mr. Gensler also has the authority to solidify rulemaking that has already been proposed and has undergone a public comment period required under the Administrative Procedures Act (APA). For example, he could finalize rulemaking on the SEC's updated definition of “exchange,” which would expand registration requirements for market makers, including some crypto businesses.

However, in response, crypto advocates may sue the SEC over the new rules, according to people familiar with the matter. And Congress can also use the Congressional Review Act to overturn these rules, as long as they take effect within 60 days of Congress convening. This time constraint means that reversing the rules passed by Gensler between now and Jan. 20 will take up Congress' time early in the incoming administration.

read more: Immutable issued a Wells notice just before the election. Does the SEC have time to follow through?

Any rule that is finalized and Congress does not act on within 60 days could also be rescinded by the new SEC Chair. However, this would be a longer process, as the agency would effectively be issuing a new rule to rescind the rule Gensler finalized, and would also have to follow APA's public comment process. .

Although unusual, there is some historical precedent for the SEC taking action between the election and inauguration of a new president. For example, the Trump administration sued Mr. Ripple made the statement on December 22, 2020, just before the end of his term, but at that time the SEC was not very politicized, and it was expected that the SEC chairman appointed by Mr. Biden would take a clearly different tone. The timing may have had little to do with it.

A source who spoke with Unchained explained that it is unusual for an SEC enforcement action to be so heavily politicized, and that speculation about what Gensler might do regarding cryptocurrencies in his later years is unprecedented. . “This is a sign of Gary’s tenure and the anti-crypto movement,” explained a source with experience fighting SEC lawsuits. “The SEC's enforcement approach has never been as dependent on presidential elections as it is today. ”