Former President Donald Trump made waves at the recent 2024 Bitcoin Conference in Nashville when he pledged to “make crypto great again” – including firing the Securities and Exchange Commission (SEC) Chair on his first day back in the White House.
Trump’s promise to oust the crypto-skeptic Gary Gensler resonated with many in the crypto industry who were concerned about the SEC’s enforcement approach to regulating the crypto space. However, a closer examination of the legal and political realities suggests that Trump’s promise may be easier said than done.
Legal Limits And Political Realities
According to a Fortune report, the SEC operates as an independent federal agency, with commissioners— including the chair—shielded by protections that prevent arbitrary removal.
These safeguards reportedly maintain the agency’s autonomy from political influence and ensure that regulatory decisions are based on legal and policy considerations rather than political pressure.
Looking at the legal landscape, a framework established by acts of Congress and legal precedent, most notably the 1935 Supreme Court case Humphrey’s Executor v. United States, limits a president’s ability to remove commissioners of independent agencies without cause.
In addition, political dynamics come into play. While the Senate confirms the appointment of the SEC chairman, removal does not typically require Senate approval.
Nevertheless, any abrupt decision to remove Gensler could spark congressional opposition and be seen as setting “a dangerous precedent.”
The Long Road To A Pro-Crypto SEC Chair
Despite calls from various quarters, including notable figures in the crypto industry and senior politicians like Senator Warren Davidson, for Gensler to step down due to perceived shortcomings in the crypto industry, the path to his removal is far from instantaneous.
Therefore, barring an unexpected resignation by the anti-crypto chairman, the prospect of Gensler’s departure remains a long and meticulous process, according to Fortune’s analysis of the case.
That’s not to say there are no avenues for Trump to remove Gensler potentially. Per the report, if the administration can build a credible case for “inefficiency, neglect of duty, or malfeasance” – for example, by pointing to the SEC’s legal struggles, such as its defeat in the high-profile Ripple case – then the President could initiate formal removal proceedings.
However, Fortune points out that even in this scenario, the process would be anything but quick. Experts estimate that the full sequence of steps, from initial intent to final resolution, could take anywhere from six months to more than a year- a timeline that would likely outlast Gensler’s remaining tenure.
Featured image from DALL-E, chart from TradingView.com