Several experienced enforcement attorneys are poised to leave their posts in the U.S. Securities and Exchange Commission’s (SEC) Crypto Assets and Cyber Division.
That’s according to Fox Business correspondent Charles Gasparino, who warned on Feb. 9 that it’s a sign that more resumes from current SEC employees are being submitted and that many are looking to jump on board. did.
The report comes as an undercurrent of dissatisfaction continues to surface within the cryptocurrency industry, with claims that the agency’s director, Gary Gensler, is being overly restrictive towards companies.
FOX Business journalist Eleanor Terret recently reported that the SEC is moving forward with a record $2.4 billion funding request aimed at strengthening the agency by adding 170 staff positions. . A portion of that amount will be earmarked for the very units facing potential layoffs.
These appointments reportedly come despite an industry backlash against what it sees as aggressive regulatory overreach by the SEC, particularly in the decentralized finance (defi) space, where traditional securities laws are difficult to apply. , which is said to be aimed at strengthening the SEC’s control over the complex and evolving cryptocurrency market. This was a big challenge for players.
Speculation increases about Gensler’s future
Compounding the issue of losing experienced staff is the increasingly uncertain political climate leading up to the US presidential election.
Analysts believe Gensler’s chairmanship could be extended until 2026 if President Joe Biden secures a second term after the 2024 presidential election. A victory for Republican front-runner Donald Trump is likely to shake up the SEC’s direction.
The intertwining of political outcomes and SEC direction also raises further questions about the future fairness and effectiveness of the Commission’s regulatory strategy in the virtual currency industry.
Traditionally, SEC chairs have often resigned from their positions when the president changes political parties, as seen with Jay Clayton’s resignation after the November 2020 election. Such moves are typically intended to make it easier for the incoming president to appoint a new SEC chair and ensure that the commission maintains a majority that reflects the party in power.
Industry analyst MetaLawMan suggested that a Republican candidate like former President Trump or an outlier candidate like Robert F. Kennedy Jr. should win the next election. The question is whether Gensler will uphold this long-standing tradition.
MetaLawMan suggested that Gensler, whose term naturally ends in 2026, could resist stepping down and break away from historical norms.
He said this hypothesis poses unique challenges because there is no established example of a president firing an SEC commissioner for “just cause” during a transition of power.
The lawyer believes that the outcome of this political chess game could have a significant impact on the crypto sector.