SEC Chair Gary Gensler, whose ambitious agenda drew fierce resistance from Wall Street and the crypto industry, plans to step down on Jan. 20.
“The Securities and Exchange Commission (SEC) is a remarkable agency,” Gensler said in a statement on Thursday. “The staff and the commission are deeply mission-driven, focused on protecting investors, facilitating capital formation and ensuring that the markets work for investors and issuers alike.”
His departure will leave the SEC in the hands of an acting chair who’s expected to be either Mark Uyeda or Hester Peirce — both Republican commissioners.
Gensler, a self-described “markets guy” appointed by President Joe Biden in 2021, has pursued an aggressive agenda highlighted by climate-risk disclosures, stock-trading reforms and crackdowns on crypto scofflaws. Some of his regulations will leave a lasting imprint on finance. Others have been stymied in conservative courts.
The Trump administration’s coming pick for SEC chair could try to further unwind Gensler’s signature rules and take a more crypto-friendly approach to enforcement.
Gensler’s policy achievements include speeding up the settlement time for US stock trades and a new regulation that will result in trillions of dollars more in US Treasury market transactions to be centrally cleared each day. Corporate insiders also face stricter disclosures and rules for stock sales.
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Some of the pillars of Gensler’s agenda faced legal challenges, however.
The SEC in March published sweeping rules calling on businesses to reveal details about their greenhouse-gas emissions and how climate change could affect their bottom lines. The agency froze the rules in April after multiple lawsuits.
A federal judge on Thursday struck down new SEC rules that would have required some Wall Street firms to register as dealers in the Treasury market. Hedge funds had sued in March to block the regulations, saying they were too broad and could harm the market.
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“His tenure should be thought of as extraordinarily ambitious in terms of scope of issues he wanted to focus on,” said Tyler Gellasch, head of the Healthy Markets Association, a trade group that includes pension funds and others. “That agenda ran face first into an onslaught of litigation.”
Crypto landscape
Trump’s SEC will probably ease enforcement against brokers, banks and hedge funds for using third-party messaging apps to communicate. The digital-asset industry could experience a sea change in policy.
Gensler doggedly pursued crypto fraudsters, as well as companies like Coinbase Global Inc. and proprietary trading behemoth DRW Holdings for failing to register with the agency. The industry had pushed back hard, saying he had provided no real way for the nascent asset class to fit within decades-old structures.
Gensler was frequently criticised by the industry for clamping down on the market instead of making clear how to play by the rules.
“My mom always told me if I didn’t have anything nice to say, don’t say anything at all. So I’m just gonna sit this one out,” Coinbase Chief Legal Officer Paul Grewal wrote on X after Gensler announced his pending departure.
Trump, who embraced cryptocurrency during his campaign, told supporters earlier this year he would fire Gensler on “day one.”
Robinhood Markets Inc. legal chief Dan Gallagher, former SEC Commissioner Paul Atkins, and Robert Stebbins, a partner at Willkie Farr & Gallagher, have been considered to be possible Trump picks to lead the agency, Bloomberg News reported earlier this month.
