Potential SEC Chair Signals Pro-Crypto Shift After Gensler Resignation
The departure of Gary Gensler as chair of the U.S. Securities and Exchange Commission (SEC) has set the stage for a potential shift in the agency’s approach to cryptocurrency regulation. Among the frontrunners to replace Gensler is Mark Uyeda, a current SEC commissioner known for his pro-crypto stance.
Speaking on Fox Business on November 22, 2024, Uyeda emphasized the importance of regulatory clarity for the crypto industry. His remarks echoed the views of President-elect Donald Trump, who has been vocal about fostering a more supportive environment for digital assets.
“First off, from a regulatory perspective, we can provide the appropriate clarity,” said Uyeda. “Some crypto is not even a security at all, but we need to make clear whether you fall within SEC jurisdiction or not.”
A Shift from Gensler’s ‘War on Crypto’
Under Gensler’s leadership, the SEC was widely criticized for its “regulation by enforcement” approach toward crypto firms. Rather than creating clear regulatory guidelines, the SEC pursued legal action against several high-profile crypto companies, prompting frustration within the industry.
Uyeda criticized this strategy, suggesting that a better approach would involve regulatory sandboxes for crypto projects. These sandboxes would provide startups with a controlled environment to test products and services under limited regulatory oversight. This model is used in other countries, including the United Kingdom and Singapore, to foster innovation in financial technology (fintech).
“Whoever steps into that job, there is a lot of work that needs to be done to address some of the regulatory excesses, not only at the SEC but at other administrative agencies,” Uyeda added.
He also emphasized the need for “cohesion and coordination” with Congress and the White House, suggesting that future crypto policy should be developed in collaboration with other federal agencies.
Who Will Lead the SEC in 2025?
While Mark Uyeda has emerged as a possible contender for SEC chair, he has not confirmed whether he would accept the role. Uyeda, a Republican, was first nominated to the SEC by President Joe Biden in 2022 to fill a vacant seat and later reappointed for a second term in 2023.
Another name frequently mentioned in the running for the position was Dan Gallagher, a former SEC commissioner and current Robinhood executive. However, reports from November 22 indicate that Gallagher has declined interest in the role, narrowing the field of possible candidates.
At present, President-elect Donald Trump has not announced his official pick for SEC chair. However, many believe Uyeda’s views on crypto regulation, combined with his experience as an SEC commissioner, make him a strong contender.
Regulatory Clarity on the Horizon?
A major point of contention during Gensler’s tenure was the lack of clear rules for crypto firms. This ambiguity left many blockchain companies unsure of how to comply with U.S. regulations. Uyeda has been critical of this approach, previously calling for the SEC to establish clear guidelines instead of relying on lawsuits.
If Uyeda is selected as SEC chair, industry experts expect him to prioritize rulemaking over enforcement, which could lead to a friendlier regulatory environment for crypto firms. One proposed strategy is the use of regulatory sandboxes, which would allow firms to innovate without the constant threat of enforcement actions.
Uyeda’s commitment to a pro-crypto stance is seen as a welcome change, particularly after a year in which the SEC filed 583 total enforcement actions and demanded nearly $8.2 billion in financial remedies. Several high-profile crypto-related enforcement actions in 2024 included allegations of misconduct against HyperFund and Novatech, as well as accusations against Silvergate Capital for providing “false and misleading disclosures” to investors regarding its crypto exposure.
What’s Next for the SEC?
With Gary Gensler set to step down on January 20, 2025 — the same day as Trump’s inauguration — the SEC is poised for a shift in leadership. If Uyeda takes the role, the regulatory environment for crypto could become significantly more innovation-friendly. This change would align with Trump’s broader campaign pledge to support the growth of blockchain technology and reduce regulatory overreach.
While it remains to be seen who will ultimately be appointed as the new SEC chair, one thing is clear: the agency’s stance on crypto regulation is likely to shift. If Uyeda’s vision becomes reality, the SEC could move from enforcement-first to clarity-first, providing much-needed guidance to the crypto industry.