Investing.com – Former President Donald Trump, who continues to present himself as the pro-crypto candidate, has taken aim at U.S. Securities and Exchange Commission Chairman Gary Gensler, calling 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 crypto sector until late 2026.
In front of a cheering crowd at the biggest conference of the year, Trump vowed to fire the man he called the U.S. blockchain industry’s number one enemy. But there is no precedent for a president to directly fire an SEC chairman.
Typically, SEC chairs resign when there is a change in the White House, allowing the new administration to appoint a new leader.
“The Senate confirms the 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 can be from the same party as the chairman.”
With Democrats currently holding a 3-2 majority and Gensler as chairman, the firm notes that Commissioner Caroline Crenshaw’s term expired in June, but President Biden nominated her for a second term. That nomination should secure the Democratic majority beyond 2024.
If Trump wins, he won’t be able to nominate a new SEC commissioner until June 2025, when Republican Hester Peirce’s term expires. And even then, Cowen notes, “this pick won’t give the GOP a majority because Peirce is a Republican.”
“Trump could get that majority sooner if Gensler resigned, but there’s no reason why he has to go.”
It is possible, TD Cowen suggests, that Gensler will remain as commissioner to prevent the GOP from gaining a majority.
“Democrats ousted the Republican FDIC chairman after the last election,” TD Cowen analysts said in a note Tuesday. “We expect progressives to pressure Gensler to preserve Democrats’ political victories by denying the GOP a majority on the SEC for at least 18 to 24 months.”
If Gensler remains in power, the report suggests, crypto policy could be stalled. While enforcement could be relaxed, enacting regulatory changes or settling existing legal cases could become difficult with a Democratic majority still in place. TD Cowen further speculates that Trump could try to fire Gensler, but “protections for commissioners are unclear, and we believe this would be subject to litigation.”
TD Cowen concludes: “It’s hard to see the point of having bipartisan commissions if presidents can fire members of the opposing party for any reason.”
