Gary Gensler, the high-profile and often polarizing chairman of the U.S. Securities and Exchange Commission, has announced his resignation, effective the day President-elect Donald Trump takes office.
Here’s the announcement for X:
Gensler’s decision is not entirely unexpected to those familiar with Washington’s political rhythms. Leadership changes in federal agencies often coincide with the emergence of a new administration, especially when there is an ideological shift.
Let’s take a closer look at the situation.
Gensler cracks down on cryptocurrency
Gensler’s term was scheduled to run until 2026, but his resignation fits this unwritten rule of political transition.
Gensler’s term, which began under President Joe Biden in 2021, was anything but smooth. Known for his bold and decisive regulatory stances, he led an unprecedented crackdown on the cryptocurrency industry. He once described it as a field “rampant with fraudsters and fraudsters.”
Under his leadership, the SEC initiated a record 46 enforcement actions against cryptocurrency-related companies in 2023 alone, a 53% increase from 2022.
Some of the cryptocurrency-related lawsuits filed seemed reasonable. For example, the SEC’s lawsuit against Terraform Labs involves allegations of a large-scale fraud scheme. Last June, a federal jury ruled against Terraform and its co-founder Dodo Kwon. They were ordered to pay more than $4.5 billion in fines, the largest ever imposed in a cryptocurrency-related case.
While some have applauded his efforts to bring order to the industry, Gensler’s critics often accuse him of excessive regulation and stifling innovation, especially in relation to lawsuits against Ripple (XRP) and Coinbase.
This year, Trump, whose family founded a cryptocurrency startup, expressed disdain for Gensler during the campaign and promised to replace him “on day one.”
Dan Gallagher, Robinhood Markets’ chief legal officer, was considered a replacement for Gensler but is no longer interested.
As the SEC prepares for this leadership change, it faces important questions about its future direction. What does Gensler’s departure mean for financial regulation in the United States? Who will take the lead, and how will their approach shape the country’s financial landscape?
When Gensler confirmed his resignation, social media, especially cryptocurrency enthusiasts living in
Many within the cryptocurrency community, especially supporters of Ripple, did not hesitate. Known as the “XRP Army,” they have long blamed Gensler for the SEC’s aggressive litigation against Ripple Labs, which has driven down the value of XRP and dragged the community into years of legal battles.
One XRP supporter tweeted, “Congratulations to the XRP Army. “This is the moment we have been waiting for,” he wrote.
Criticism extended beyond XRP, with retail investors calling Gensler’s tenure “the most destructive period in SEC history.” They cite his initial resistance to approving a Bitcoin (BTC) ETF and his handling of smaller investor disputes, such as the MMTLP shareholder case.
Adding to the backlash, the same post referenced a reported rebuke of the SEC by a federal judge in another enforcement case, framing it as a reflection of Gensler’s heavy-handed and controversial approach.
“Thank you for protecting anyone from real scams. You set America back years with cryptocurrencies,” said another social media user.
Celebrities in the industry also joined the ranks of critics. Justin Sun, founder of Tron (TRX), took a harsher tone, calling Gensler’s resignation “too late” and lamenting that he had caused “enormous damage” to the U.S. market and the global economy.
In the end, Gensler’s exit isn’t just the end of a controversial chapter. This is the beginning of a significant transition for the SEC and the industries it oversees.
Who will lead the SEC next?
Gensler’s resignation shifts the focus to who will succeed him. This is a decision that could change the future of U.S. cryptocurrency regulation.
Fox Business journalist Eleanor Terrett suggested that the next SEC chairman could bring a new outlook on cryptocurrencies.
According to her sources, the incoming administration is prioritizing a candidate who is a “cryptocurrency advocate” with the ability to handle the SEC’s broad responsibilities, including oversight of public companies, stock and bond markets, and private funds.
Among the main contenders is former SEC Commissioner Paul Atkins, known for his free market philosophy and favorable stance on cryptocurrencies.
Charles Gasparino of Fox Business reports that Atkins is currently considered a frontrunner thanks to strong support from both the business and cryptocurrency communities.
Atkins’ approach stands in stark contrast to Gensler’s execution-heavy style. While critics argue Atkins may be too lenient, his supporters believe his leadership will foster innovation by lowering regulatory barriers.
Another prominent figure is Robert Stebbins, a partner at Willkie Farr & Gallagher and former SEC general counsel under Jay Clayton.
Stebbins is widely regarded as a consistent, no-nonsense candidate who brings deep legal and regulatory expertise. Although his pro-cryptocurrency stance is less favorable than Atkins’, his previous experience at the SEC has earned him trust from policymakers and financial institutions alike.
Teresa Goody Guillén is also emerging as a leading candidate. He is an SEC veteran and partner at BakerHostetler, where he co-leads the blockchain practice.
Cryptocurrency companies are reportedly defending her nomination, confident that her dual experience as an SEC insider and blockchain advocate will bring a balanced perspective to the role.
Former Acting Comptroller of the Currency Brian Brooks is another notable name nominated for key financial regulatory positions, including SEC Chairman.
Dubbed the “cryptocurrency auditor” for his blockchain-friendly policies during his tenure at the OCC, Brooks has been an active advocate for integrating cryptocurrencies into mainstream banking.
Terrett noted that Brooks is being considered for a variety of roles beyond the SEC, but his appointment could signal a period of transformation for cryptocurrency regulation.
Interestingly, the reorganization may not be limited to the SEC. Terrett suggests the Trump administration is exploring expanding the Commodity Futures Trading Commission’s role in cryptocurrency oversight.
Such a move could include splitting regulatory responsibilities between the SEC and the CFTC or even transferring primary authority to the CFTC entirely.
But as Terrett points out, these changes would require a massive increase in funding for the CFTC, which currently lacks the resources to administer such broad authority. For now, speculation continues.
prepare for change
Gensler’s resignation has left cryptocurrency industry insiders speculating about what will happen next, with many experts pointing to a mix of challenges and opportunities.
Slava Demchuk, CEO of AMLBot, spoke about one of the most pressing issues in a conversation with crypto.news. That said, there is a lack of clear rules for cryptocurrencies in the United States, especially when compared to the EU’s regulated market for crypto assets.
“Without clear regulations, cryptocurrency companies are left in limbo, unable to fully understand compliance requirements or attract major institutional participants.”
One particularly tricky issue is that cryptocurrency companies are having difficulty accessing banking services. Niko Demchuk, head of legal at AMLBot, explained how banks in the US are often hesitant to work with cryptocurrency companies due to the risk of regulatory failure.
“Banks don’t want to partner with non-compliant companies. Even indirect connections to cryptocurrencies could result in investigations or fines, which could create bottlenecks in the industry and make it difficult for businesses to conduct their day-to-day financial operations.”
If the next chairman adopts a more cryptocurrency-friendly stance, there is potential for major improvements, including clearer regulations, better access to banking, and a more friendly environment for innovation.
The prospect of a regulatory framework similar to the EU’s MiCA is also receiving attention. Experts believe such a framework could bring greater consistency to U.S. markets while addressing issues such as cybersecurity, anti-money laundering, and market manipulation.
For cryptocurrency companies, this transition period is an opportunity to stay ahead and focus on investing in tools such as strengthening compliance systems, strengthening know-your-customer processes, and transaction monitoring.
“Companies must take active action. Regulatory changes are coming, and those who are prepared will be able to adapt more smoothly,” Demchuk added.
For cryptocurrency companies, now is the time to act. Because what happens next could change the future of the cryptocurrency industry in the United States and around the world.