Post-Election Scenarios for Crypto Regulation

Multiple scenarios could unfold following the U.S. presidential election in November amid promises from candidate Donald Trump to fire agency chair Gary Gensler, potentially influencing crypto regulation and enforcement.

Gensler’s Future

Securities and Exchange Commission (SEC) Chair Gary Gensler may remain at the agency as a commissioner if Trump wins, noted investment bank TD Cowen. This could result in a shift that “deprives the GOP of a majority” at the SEC, leaving crypto policy potentially stalled. According to the TD Cowen Washington Research Group, led by Jaret Seiberg, if Gensler remains, enforcement may ease but adopting regulatory changes could be difficult if Democrats hold a majority.

The SEC’s leadership comprises five commissioners appointed by the President, with limits on partisan representation. Currently, there are two Republican commissioners and three Democrats. Gensler’s term at the SEC lasts until June 5, 2026.

Potential Actions by Trump

Trump could potentially fire Gensler, as he has indicated at the Bitcoin 2024 conference his intent to replace Gensler if elected. The crypto industry has criticized Gensler’s approach toward regulation and enforcement actions against major entities like Coinbase and Binance. However, protections for commissioners against removal are ambiguous, and litigation could favor Gensler, according to Seiberg.

Former Republican SEC Commissioner Michael Piwowar suggested Gensler may choose to remain a commissioner even if Trump becomes president. He noted a precedent where former SEC Chair Mary Jo White stepped down when Trump was inaugurated.

Impact of Crenshaw’s Confirmation

Democratic Commissioner Caroline Crenshaw’s recent nomination requires confirmation from lawmakers. Her status may affect the SEC’s direction; if she fails to be reconfirmed, Trump could appoint a Republican to the role. Piwowar emphasized that even a Republican chair would wield considerable power within the commission.

While voting on rules often follows party lines, some decisions could be made with bipartisan support even in a minority commission.

Harris’s Potential Influence

Should Kamala Harris ascend to the presidency, her stance on crypto remains unclear. While she has not vocalized strong support for the sector, her team has reached out to the crypto industry. If Gensler remains, Harris would need to decide his role moving forward.

Ebersole emphasized that the direction of crypto regulation depends significantly on which party wins the White House, influencing the activities of financial regulatory agencies.

Conclusion

The outcomes based on the presidential election outcomes could dramatically shape the future of U.S. crypto regulation, with significant implications for enforcement and policy in the sector.