Investing.com – Former President Donald Trump, who continues to promote himself as the pro-cryptocurrency candidate, has taken aim at U.S. Securities and Exchange Commission Chairman Gary Gensler, labeling him the industry’s biggest villain.
However, US investment bank TD Cowen speculates that Gensler could remain as commissioner, potentially delaying expected regulatory relief for the cryptocurrency sector until late 2026.
Trump promised to fire the man he called the number one enemy of the American blockchain industry in front of an enthusiastic crowd at this year’s largest conference. But there is no precedent for a president directly firing an SEC chair.
Typically, SEC chairmen step down when there is a change in the White House, allowing the new administration to appoint a new leader.
“The Senate confirms SEC commissioners for five-year terms, which are staggered so that one term expires each June,” TD Cowen noted. “No more than three of the five commissioners may be from the same party as the President.”
Democrats currently hold a 3-2 majority and Gensler is the chairman. The firm notes that Commissioner Caroline Crenshaw’s term expired in June, but President Biden has nominated her for a second term. The nomination is expected to secure the Democratic majority beyond 2024.
If Trump wins, he won't be able to appoint a new SEC commissioner until June 2025, when Republican Hester Peirce's term expires. Even then, TD Cowen notes, “This election will not give the GOP a majority, since Peirce is a Republican.”
“Trump could get that majority sooner if Gensler resigns, but nothing forces him to leave.”
There is a possibility, TD Cowen suggests, that Gensler could remain as commissioner to prevent the Republican Party from gaining a majority.
“Democrats ousted the Republican FDIC chair after the last election,” TD Cowen analysts said in a note Tuesday. “We expect progressives to pressure Gensler to preserve Democratic policy victories by depriving the GOP of a majority at the SEC for at least 18 to 24 months.”
If Gensler stays, the report suggests, cryptocurrency policy could stall. While enforcement measures could ease, adopting regulatory changes or resolving existing legal cases could become challenging with a Democratic majority still in place. TD Cowen further speculates that Trump could try to fire Gensler, but “protections for commissioners are murky and we believe this would end up in litigation.”
TD Cowen concludes: “It is hard to see the point of having bipartisan commissions if presidents can fire members of the opposing party for any reason.”
