Securities and Exchange Commission (SEC) Chair Gary Gensler, known for his ambitious and often controversial regulatory agenda, will step down from his position on January 20th. His departure marks the end of a tenure marked by significant policy changes that have drawn both praise and fierce opposition from Wall Street and the cryptocurrency industry.
In a statement released Thursday, Gensler praised the SEC as a “remarkable agency” with a “deeply mission-driven” staff focused on investor protection and efficient capital formation.
Gensler’s exit leaves the SEC in the hands of an acting chair, likely to be either Republican Commissioner Mark Uyeda or Hester Peirce. This shift in leadership could signal a potential change in direction for the agency, particularly regarding the regulation of cryptocurrency.
Appointed by President Joe Biden in 2021, Gensler, a self-described “markets guy,” pursued an aggressive agenda focused on climate-risk disclosures, stock-trading reforms, and crackdowns on cryptocurrency companies perceived as flouting regulations. While some of his initiatives have left a lasting impact on the financial landscape, others have faced legal challenges in conservative courts. The incoming Trump administration’s pick for SEC chair could further attempt to dismantle Gensler’s signature rules and adopt a more lenient approach to cryptocurrency enforcement.
Among Gensler’s key achievements are the acceleration of US stock trade settlement times and a new regulation mandating central clearing for trillions of dollars in US Treasury market transactions daily. He also implemented stricter disclosure requirements and rules for stock sales by corporate insiders.
However, the next SEC chair may choose to reverse course on some of Gensler’s priorities, such as increased regulation of hedge funds and private equity through enhanced disclosures. The agency’s climate-risk disclosure rules, already facing legal challenges, could also be targeted for reversal. Furthermore, enforcement actions against brokers, banks, and hedge funds for using third-party messaging apps might be eased under the new leadership.
The cryptocurrency industry, in particular, could see a significant shift in SEC policy. Gensler actively pursued alleged crypto fraudsters and companies like Coinbase and DRW Holdings for alleged registration violations.
