Donald Trump can't fire Gary Gensler from the SEC
Donald Trump's recent victory in the United States elections has reignited debates about the leadership of the SEC (US Securities and Exchange Commission), the body responsible for regulating the financial market and, especially, the cryptocurrency market.
During the campaign, Trump promised to dismiss Gary Gensler, current chairman of the SEC, if he became president. However, experts point out that, according to the Constitution, the President of the United States does not have direct authority to fire the leader of the SEC, unless there are clear legal justifications, such as misconduct or inefficiency.
Historically, SEC chairs tend to resign after changes in government, as noted by analyst Markus Thielen, director of 10x Research. According to him, Gensler is likely to follow the pattern of his predecessors, resigning even before Trump's inauguration, to facilitate the transition and pave the way for an SEC chairman aligned with the new administration.
Donald Trump
This scenario previously occurred with Trump appointee Jay Clayton, who resigned just before Joe Biden's inauguration in 2021. Similarly, Barack Obama appointee Mary Jo White also left office on Trump's inauguration day in 2017.
This voluntary departure movement allows the new president to choose a leader for the SEC who shares his policy guidelines and goals, a pattern that strengthens the agency's autonomy.
Even if Gensler chooses to remain in office, Trump cannot remove him without justification. The United States Constitution requires the president to present valid and proven cause to begin the process of dismissing an independent agency leader.
Timothy Peterson, an economist, suggests that Gensler could face questions due to issues such as the recent hack of the SEC's account on Platform X (formerly Twitter), as well as legal disputes involving the agency's decision on Bitcoin ETFs and the Ripple case.
However, the process to remove the SEC chairman through legal and administrative actions can be lengthy, taking up to more than a year. This implies that, if Gensler decides to remain and Trump insists on his resignation, the replacement would not occur immediately, as desired by the president-elect.
For the cryptocurrency sector, Trump's pledge to ease current regulatory pressures represents hope for change. During the campaign, he guaranteed that he would end Joe Biden's “anti-Bitcoin crusade”, seeking to create a friendlier environment for the crypto ecosystem.
The community is already speculating possible replacements, such as SEC Commissioner Hester Peirce, nicknamed “Crypto Mom” for her pro-crypto stance, and J. Christopher Giancarlo, known as “Crypto Dad”.
Although Trump cannot simply fire Gensler, the expectation of a voluntary resignation reinforces the idea of a change in regulatory approach to the cryptocurrency sector.