Gary Gensler to Resign as SEC Chair: What Could Happen Next Under Trump?

Gary Gensler, the controversial chair of the U.S. Securities and Exchange Commission (SEC), has announced his resignation, effective on the day President-elect Donald Trump assumes office.

Gensler shared his resignation on X, marking a significant shift for U.S. financial regulation amidst a broader political transition.

A Predictable Shift Amid Political Change

Gensler’s resignation comes as no surprise. Leadership changes at federal agencies often align with the arrival of a new administration, particularly when a stark ideological shift occurs. Although Gensler's term was scheduled to extend through 2026, his departure underscores the unwritten rules of political transitions in Washington.

Gensler’s Controversial Legacy: A Crypto Crackdown

Appointed in 2021 under President Joe Biden, Gensler spearheaded an aggressive regulatory campaign, particularly targeting the cryptocurrency industry. Describing the sector as “rife with fraud and hucksters,” his SEC initiated 46 enforcement actions against crypto entities in 2023, marking a 53% increase from the previous year.

Notable cases included the SEC’s lawsuit against Terraform Labs and co-founder Do Kwon, which concluded with a historic $4.5 billion penalty, the largest ever imposed in a crypto-related case. While some praised his efforts to bring accountability to the space, critics frequently accused Gensler of regulatory overreach, particularly in his lawsuits against Ripple (XRP) and Coinbase.

Trump, whose family recently launched a crypto startup, repeatedly criticized Gensler on the campaign trail, pledging to replace him immediately upon taking office.

Social Media Reactions: Relief and Criticism

News of Gensler’s resignation ignited social media, particularly among crypto enthusiasts on X. Many, including Ripple supporters often referred to as the “XRP Army,” expressed relief. For years, they blamed Gensler for the prolonged legal battles that negatively impacted XRP’s value.

One user tweeted, “Congratulations to the XRP Army—this is the moment we’ve been waiting for!”

Others extended criticism beyond XRP, targeting Gensler’s handling of Bitcoin ETF approvals and retail investor disputes. Many retail investors labeled his tenure as “the most destructive period in SEC history,” citing a perceived failure to protect smaller investors.

Prominent industry figures also joined the conversation. Tron founder Justin Sun condemned Gensler’s policies, calling his resignation “too late” while lamenting the damage inflicted on U.S. markets and global crypto innovation.

Who Will Lead the SEC Next?

With Gensler stepping down, speculation over his successor is intensifying. Early reports suggest that Trump’s administration may prioritize a leader with a more crypto-friendly stance. Among the potential candidates:

• Paul Atkins: A former SEC commissioner and vocal proponent of free markets and innovation. Known for his favorable view of crypto, Atkins represents a significant departure from Gensler’s enforcement-heavy approach.

• Robert Stebbins: Former SEC General Counsel under Jay Clayton, Stebbins is viewed as a steady and pragmatic choice with deep legal expertise.

• Teresa Goody Guillén: A partner at BakerHostetler and co-lead of its blockchain practice, Goody Guillén’s dual expertise in regulation and blockchain positions her as a balanced candidate.

• Brian Brooks: The former Acting Comptroller of the Currency and a staunch crypto advocate, Brooks has been dubbed the “Crypto Comptroller” for his work integrating blockchain with traditional finance.

Eleanor Terrett of Fox Business noted that Trump’s team is also exploring an expanded role for the Commodity Futures Trading Commission (CFTC) in regulating crypto. However, this shift would require significant funding increases for the CFTC, which currently lacks the resources for such an expanded mandate.

A Critical Moment for U.S. Crypto Regulation

Gensler’s departure signals the beginning of a new chapter for U.S. financial regulation. Crypto companies, often left in regulatory limbo during his tenure, are optimistic about the potential for clearer guidelines and improved banking access under new leadership.

Experts suggest that the U.S. could look to the European Union’s Markets in Crypto-Assets (MiCA) Regulation as a blueprint for creating comprehensive standards. Such measures could address key challenges, including cybersecurity, anti-money laundering compliance, and market manipulation.

As the industry awaits a leadership transition, crypto firms have an opportunity to bolster compliance systems, strengthen know-your-customer processes, and invest in monitoring tools. Slava Demchuk, CEO of AMLBot, advised, “Businesses need to be proactive. Regulatory changes are coming, and those who are prepared will have a smoother adjustment.”

Preparing for the Next Era

The resignation of Gary Gensler marks a pivotal moment for the SEC and the industries it oversees. With Trump set to appoint a new chair, the direction of U.S. financial regulation—particularly in the crypto space—hangs in the balance.

This transitional period offers both challenges and opportunities. The decisions made now will shape not only the future of U.S. financial markets but also the global perception of American leadership in blockchain innovation.