A group of experienced enforcement lawyers is about to leave the crypto assets and cyber section of the U.S. Securities and Exchange Commission (SEC).
On Feb. 9, Fox Business correspondent Charles Gasparino raised concerns by saying that there was a noticeable rise in resumes being passed around among present SEC staff, which is a clear sign that many people are thinking about leaving their jobs.
SCOOP: @SECGov bracing for major exodus among senior enforcement lawyers in its crypto assets and cyber unit, according to officials at major law firms who have seen several of the resumes. @FoxBusiness is withholding names to protect privacy; the moves suggest that the bleed of…
— Charles Gasparino (@CGasparino) February 9, 2024
Uncertainties Surrounding SEC Crypto Division and Gensler’s Future
Insiders in the crypto industry are becoming increasingly dissatisfied with SEC Chair Gary Gensler‘s perceived strict approach to companies, which could lead to this possible exit.
Eleanor Terrett, a reporter for Fox Business, recently said that the SEC is asking for a record-high $2.4 billion in funding, with a part set aside for the crypto division. By adding 170 staff roles to help with enforcement, this move is meant to make the agency stronger.
Adding to this. We reached out to @SECGov and one of the senior officials at the Crypto Assets and Cyber Unit for comment and have not yet heard back. @GaryGensler requested a record $2.4 billion budget for the agency this year, in part to add an additional 170 staff positions,… https://t.co/WH48kKT4n2
— Eleanor Terrett (@EleanorTerrett) February 10, 2024
In response to what it sees as the SEC’s overreaching, the crypto industry, especially in the decentralized finance (DeFi) area, has fought back. Applying standard securities rules to the crypto market, which is changing quickly and is very complicated, has been hard for market participants.
There is even more doubt because of the upcoming U.S. presidential election. Analysts are guessing how it might affect Gensler’s future as SEC chair. Gensler could remain chairman until 2026 if President Joe Biden wins a second term. But if Donald Trump wins as the GOP nominee, the SEC might change how it regulates businesses.
The political climate that affects the SEC’s authority makes people wonder if the Commission’s future regulatory plans in the crypto industry will be fair and effective. Usually, SEC chairs step down when the party in power changes. This way, the new president can choose a chair aligned with the party in power.
Some experts in the field, like MetaLawMan, are guessing if Gensler will stick to this practice if a Republican like Trump wins the election. MetaLawMan says that Gensler might not want to step down, even though his time ends naturally in 2026. This would be different from what has happened in the past.
If Trump wins, what happens to @GaryGensler?
SEC chairmen normally submit their resignations promptly after a Presidential election results in a change of party.
After the November 2020 election, Jay Clayton (a Trump appointee) promptly resigned both as SEC Chairman and as a…
— MetaLawMan (@MetaLawMan) February 4, 2024
There is no known example of a president firing an SEC commissioner “for cause” during a change of power, so this hypothetical situation is complicated.
