In a recent article, cryptocurrency-focused lawyer MetaLawMan posed an interesting question regarding the future of current Securities and Exchange Commission (SEC) Chairman Gary Gensler if Donald Trump wins the 2024 US Presidential elections.
Historically, SEC chairmen tender their resignations immediately following a Presidential election that results in a party change. This tradition was continued by Trump appointee Jay Clayton, who resigned as both SEC Chairman and commissioner after the November 2020 election.
Clayton’s resignation allowed President-elect Biden to appoint his own SEC chairman, preserving the traditional 3-2 majority of commissioners in favor of the party holding the chairmanship.
Gary Gensler’s 5-year term as SEC chairman will naturally end in 2026. But if a Republican candidate wins the 2024 Presidential election, the question will arise: Will Gensler follow long-standing SEC tradition and submit his resignation immediately?
If Trump becomes the Republican nominee and wins, there could be some resistance to norms of conduct for appointed officials like Gensler, according to the lawyer. There is no known precedent in which a President has had to remove an SEC chairman “with cause” in a management change scenario.
According to MetaLawMan, the potential change in leadership could have significant implications for the cryptocurrency industry. It is expected that there will still be a significant amount of litigation against crypto firms at the end of this year. A new president with a 3-2 Republican majority could change the positions the SEC takes on crypto cases. This could include promptly resolving cases on reasonable terms and outright dismissing cases in which the SEC, under Gensler, takes positions that conflict with existing securities law.
If SEC member Hester Peirce is elected as interim President, she will already have full command of all these cases and will be able to make a course correction relatively quickly.