Gary Gensler, the embattled head of the U.S. Securities and Exchange Commission (SEC), will step down on January 20, 2025, marking the end of a contentious tenure that saw sharp criticism from crypto enthusiasts and industry players. While Gensler’s departure might seem like a turning point for cryptocurrency regulation, legal experts caution against expecting immediate changes, especially in the SEC’s high-stakes litigation with Ripple.
The Ripple case, scheduled for a critical decision on January 25, 2025, looms large over the SEC’s agenda. Gensler’s exit has sparked speculation about a potential policy shift, but attorneys like Bill Morgan argue that the agency’s approach may remain consistent, given the involvement of SEC Chief Litigation Counsel Jorge Tenreiro.
I understand that Marc and my point is if Tenreiro stays in the new role it will not signal a big change in SEC enforcement policy towards crypto. Even if there is a change the SEC v Ripple Appeal may continue.
— bill morgan (@Belisarius2020) December 5, 2024
Jorge Tenreiro’s Key Role in Ripple Litigation
Tenreiro, known for his pivotal role in the SEC’s enforcement against Ripple, is expected to maintain control of the case even after Gensler’s successor, Paul Atkins, assumes office. Morgan emphasized that Tenreiro’s continuation in this role would signal continuity rather than a departure from the SEC’s current stance on crypto.
“If Tenreiro stays in the new role, it will not signal a big change in SEC enforcement policy towards crypto. Even if there is a change, the SEC v. Ripple appeal may continue,” Morgan remarked. His comments underline skepticism that Gensler’s departure will soften the SEC’s regulatory posture.
A New Era Under Paul Atkins?
Paul Atkins, a former SEC commissioner with a reputation for being more market-friendly, will step into the chairmanship amid mounting pressure to modernize the SEC’s approach to digital assets. However, his ability to influence ongoing enforcement actions remains limited.
Marc Fagel, a former SEC lawyer, weighed in, clarifying that litigation counsel like Tenreiro implement policies already approved by SEC commissioners. He questioned whether a new administration would outright dismiss an ongoing case, as such decisions have historically been rare.
Fagel noted, “Trial counsel do not make policy; they enforce decisions approved by the Commissioners. While a new SEC administration could shift priorities, the Ripple lawsuit’s trajectory may not change significantly.”
Implications for the Crypto Market
The Ripple case has broader implications for the crypto industry, as it could set a precedent for how digital assets are classified and regulated in the U.S. Gensler’s departure may offer hope to crypto proponents, but without significant policy shifts, enforcement actions like those against Ripple are unlikely to wane.
As January 2025 approaches, all eyes will be on the SEC’s leadership transition and the outcome of the Ripple litigation. While Gensler’s resignation might close one chapter, the crypto industry remains in uncharted regulatory territory, with the SEC’s stance under Atkins poised to shape the future of digital assets in America.
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Gary Gensler’s exit signals a moment of transition for the SEC, but continuity in legal battles like the Ripple case suggests that the road to regulatory clarity for crypto remains fraught. Whether new leadership can strike a balance between enforcement and innovation will determine the next phase of crypto’s evolution in the U.S.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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