With the impending departure of Gary Gensler from the Securities and Exchange Commission (SEC) scheduled for January 20, 2025, the regulatory body is poised for notable shifts. This transition is compounded by the news that another Democratic commissioner, Jaime Lizárraga, is also set to leave the SEC. These departures signify a potential pivot in the direction of the SEC’s policies, particularly in areas like cryptocurrency regulation.
Commissioner Jaime Lizárraga To Exit
According to a recent filing, Commissioner Jaime Lizárraga will officially resign from his position at the SEC by January 17, 2025. This move is anticipated to provide the Republican commissioners with an opportunity to influence the regulator’s policies more swiftly, particularly regarding cryptocurrency regulation, which might otherwise progress at a slower pace.
Lizárraga has cited his wife’s ongoing battle with breast cancer as the primary reason for his resignation, underscoring the necessity of prioritizing family during such critical times. This development leaves Caroline Crenshaw as the sole Democrat on the five-member commission as they head into 2025. Although her term has already expired, an extension could see her remain for up to 18 more months. The two standing Republican members on the commission are Hester Peirce and Mark Uyeda.
Intensifying Speculations on the Next SEC Chair
The departure of both Gary Gensler and Jaime Lizárraga has fueled speculation regarding who will assume the role of the next SEC Chair. Potential candidates under consideration include notable figures such as Robert Stebbins, Paul Atkins, and Teresa Goody Guillén. However, one name that has recently been removed from the list of contenders is Dan Gallagher, the Chief Legal Officer of Robinhood.
Dan Gallagher Out Of the Race
Dan Gallagher, who was previously seen as a leading candidate for the next SEC Chair, has publicly expressed his decision not to pursue the position. Despite acknowledging the honor of being considered, Gallagher emphasized his commitment to Robinhood and its customers, who represent a new wave of retail investors. He expressed enthusiasm about collaborating with the incoming administration to foster innovation and expand opportunities for retail investors.
Interestingly, Gallagher is not the only potential candidate to withdraw from the race. Chris Giancarlo, the former CFTC chair known as “Crypto Dad,” has also announced his lack of interest in taking on the role. On social media, Giancarlo clarified that he has no desire to “clean up a ‘Gary Gensler mess'” again and dismissed rumors of his interest in a crypto-related position at the US Treasury.
‘A Lot Of Work Needs To Be Done’ Says Mark Uyeda
Mark Uyeda, currently serving as an SEC commissioner, has emerged as a strong candidate to succeed Gensler. Uyeda has articulated a vision for the SEC that includes establishing safe harbors and regulatory sandboxes to facilitate innovation. Furthermore, he emphasizes the importance of a unified approach to cryptocurrency regulation, involving collaboration with Congress, the White House, and other federal regulatory bodies.
While the decision ultimately rests with the president, Uyeda has acknowledged the considerable work that awaits whoever is appointed as the next SEC Chair. He highlights the need to address regulatory excesses not only at the SEC but across other administrative agencies. According to Uyeda, the plethora of new rules and regulations introduced recently has led to numerous unintended consequences, many of which will require careful examination and resolution.
As the SEC prepares for these significant changes, the financial world watches closely, anticipating how new leadership will shape the future of financial regulation and innovation in the United States.
