The 2024 Election Cycle and the SEC

With the U.S. election cycle in full swing and the presidential election just around the corner, there is speculation on how government regulators could be affected by the outcome. In general, commentators have coalesced around the view that much will change regardless of who wins.

The fate of SEC Chair Gary Gensler

• Under Kamala Harris: Gensler’s fate under a Harris administration appears sealed, and it’s expected that she may opt to replace the SEC chair, primarily due to his politicization of the cryptocurrency issue^[1]and the resulting pressure from influential figures in the financial and tech sectors.^[2]
• Under Donald Trump: A Trump win would almost certainly lead to the end of Gensler’s tenure, sooner or later. Trump has stated his intention to fire Gensler.^[3]While it is generally accepted that presidents can’t actually fire SEC commissioners, including the SEC chair, they can certainly exert political pressure in an effort to influence their resignation.

Impact on regulation

• Under Harris: The SEC under Harris would generally continue or build on the regulatory priorities of the Biden administration, though the efforts to do so may well be hindered by the increasing susceptibility of regulatory efforts to legal challenges after the Supreme Court’s decision in the current term in the Loper Bright A Harris administration may well seek greater regulation of financial institutions and markets as well as increased transparency requirements, particularly regarding climate-related disclosures.^[4]
• Under Trump: A Trump victory could lead to major changes for the SEC, with further deregulation similar to his first term in 2016. It’s also possible that Trump would roll back rules implemented during the Biden administration, especially those focused on environmental, social and governance disclosures.^[5]

Impact on cryptocurrency

• Under Harris: Harris has yet to articulate a definitive stance on cryptocurrency, so it’s difficult to determine how the SEC will regard the industry if she wins. Harris appears to be open to discussions with the crypto industry, as industry groups have had informal conversations with her campaign.^[6]This apparent openness to dialogue could signify the potential for more-defined rules if she wins. Additionally, there are pro-crypto factions within the Democratic Party that are encouraging Harris to adopt a favorable stance toward digital assets.^[7]
• Under Trump: There would likely be a push for regulatory frameworks that support the growth of cryptocurrencies if Trump wins.^[8]

Conclusion

As the election approaches, the future of the SEC and its leadership hangs in the balance, with significant implications for financial regulation and market stability. The decisions made in the coming months will shape the financial landscape for years to come, reflecting broader priorities in economic policy and governance.

^[1]_CoinPedia

^[2]_TechReport

[3]_Newsweek

^[4]_{Fast Company}

^[5]_{U.S. News & World Report}

^[6]_CoinDesk

^[7]_Politico

^[8]_{The Conversation}