The future of SEC Chairman Gary Gensler has become a hot topic of discussion, with many speculating about when he might step down and the possible successors to his role. In a revealing conversation on Thinking Crypto, Cody Carbone from the Digital Chamber shared his thoughts, hinting that Gensler’s recent address in New York might have been a discreet farewell. Carbone noted that the sentiment in the room suggested a potential exit for Gensler, with the atmosphere indicating he could be preparing to leave his position.
The Customary Resignation of an SEC Chair
Traditionally, an SEC chair resigns when a new administration from the opposing political party assumes office, often around November or December. Carbone remarked, “I think his days are numbered. I wouldn’t be surprised if he was gone by the end of the day, if he was gone by the end of the week, or if he was gone before the end of the year. But I think that’s the timeline I’m looking at — December 31st, I think he’s gone.”
Given the timing of the upcoming presidential inauguration, Carbone is convinced that Gensler’s tenure at the SEC is nearing its end. He speculates that Gensler could depart as soon as the end of the week, or by December 31st at the latest.
Historical Precedents and Expectations
Historically, it is standard practice for an SEC chair to resign when an incoming administration of a different political affiliation is set to take office around November or December. Carbone expressed confidence that Gensler will not remain on Inauguration Day. “There’s no illusion that he will be there on Inauguration Day, when Trump is sworn in, or that he will be interested in being demoted to a commissioner,” he stated.
Should Gensler decide to step down, the SEC would likely appoint an acting chair. When the new administration takes control, the acting chair could potentially be one of the Republican commissioners. While the exact timing of Gensler’s departure remains uncertain, a leadership transition at the SEC seems imminent, with a new chair anticipated to assume office in 2025.
Legal Developments: Ripple vs. SEC
In December 2020, the SEC initiated a lawsuit against Ripple Labs, accusing the company of raising over $1.3 billion through the sale of unregistered securities, specifically XRP. As the case continues, the latest appeals suggest that the legal process will extend over several months. Significant legal challenges are anticipated before reaching a final verdict. Nonetheless, a potential leadership change at the SEC could bring clarity to the situation.
As the legal battle unfolds, the cryptocurrency industry and legal analysts keenly observe how the leadership dynamics within the SEC might influence the outcome. A new chair could potentially steer the regulatory approach, impacting the direction and resolution of the Ripple case. The anticipation surrounding Gensler’s future and the ongoing lawsuit emphasizes the broader implications for the SEC and its regulatory stance on digital assets.
