Is Gary Gensler on His Way Out at the SEC?

The SEC May be Poised to Become more Accommodating to Cryptocurrency

In what is being reported as a developing story that can significantly impact securities and crypto regulation, rumors are circulating that SEC Chair Gary Gensler may be on the way out as head of the agency. The reports are pointing to Hester Pierce as the most likely person to replace him. How would this impact public markets and the future state of cryptocurrency regulation? We discuss these questions and thoughts below.

Background

Whale (@whalechart) is a crypto news provider with an account on the microblogging platform X. It is widely respected, with 363,000 followers. Whale announced this morning (August 14), “SEC Commissioner Hester Peirce is being considered to replace Gary Gensler as the head of the regulatory agency.” This small post (or tweet) has triggered waves of speculation about the upcoming course of securities regulation for both registered products and cryptocurrencies like Bitcoin.

Ms. Peirce is known for her strong support of innovation and outside-the-box thinking. She has been a commissioner of the SEC since 2018, appointed by President Trump. Pierce is a former academic and lawyer who has specialized in securities law and financial regulation. She is known for her views on the regulation of cryptocurrencies and other emerging technologies.

What the SEC May Look Like Under Hester Pierce

Peirce, who has a reputation as being pro-innovation, has been a bold advocate for embracing disruptive technologies like cryptocurrencies and blockchain. If the rumors are accurate and she does find her way to the position of top securities cop, it could signal a shift towards a more accommodating regulatory stance, with a leader whose thoughts on fintech and digital assets are known.

If the days are indeed numbered for the SEC’s current head Gary Gensler, the traditional and digital asset markets would mainly view this as a positive. President Biden’s appointee, Gary Gensler, has been a catalyst behind the intensified scrutiny and rule-making within the overall cryptocurrency realm. His time in the position has led the SEC’s tightening its grip on digital asset exchanges and clamping down on many Initial Coin Offerings (ICOs).

Gensler has been acting to protect consumers, but many critics argue that the SEC under his lead, has been led to too much interference in free markets. With Peirce potentially in the drivers seat, the probability of the regulator embracing crypto assets in a less restrictive way increases dramatically.

Those impacted the most by a changed SEC head have weighed in already with diverse ideologies and opinions. Advocates assert that her penchant for innovation could sow the seeds for heightened financial growth. They contend that a friendlier regulatory outlook might be the medicine needed to embolden new ideas and investors to explore new opportunities – this, they say, could give the economy a lift.

Those opposed to a Hester Peirce nomination warn against a looser regulatory environment that could leave investors exposed to heightened risks. Their call is for the SEC to remain a vigilant guardian of investor interests, standing as a wall against potential deceit or market manipulation.

As the news regarding Peirce’s probable elevation continues to spread on social media and in articles like this, the pressing question many market participants are trying to discern is, will the SEC take a gentler road to new tech innovations or will it hold overly tight to its role concerning investor safety? If the change happens, there could be a celebratory bump in the value of crypto assets and others.

Paul Hoffman

Managing Editor, Channelchek