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Dan Gallagher is the proposed next Chair of the US Securities and Exchange Commission (SEC) in a prospective Donald Trump administration. The former agency commission welcomed his selection.
The shared sentiment is that with a Republican in office, crypto would enjoy a more favorable regulatory environment, with key commission members calling it out for problematic laws.
Crypto Investors Want Dan Gallagher for SEC Chair
Gallagher served as SEC commissioner during the tenure of former US President Barack Obama. Welcoming his selection, Gallagher said he would promote access to the markets while ensuring the US remains at the forefront of financial innovation.
Before this nomination, Hester Pierce, alias Crypto Mom, had been the likely successor in case a Republican administration took office. Her name was floated around multiple times ahead of the spot Bitcoin ETFs approval.
In September, John Reed Stark, formerly an official with the SEC’s internet office, highlighted Pierce’s name. Her lengthy track record of dissent and opposition to most crypto-related SEC actions made her the ideal candidate.
“Should a Republican get elected President, Chair Gensler would likely resign and the senior Republican appointed SEC Commissioner (in this case famed “crypto-mom” Hester Peirce) would possibly become acting Chair,” Reed Stark explained.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Notably, no more than three out of five Commissioners may belong to the same political party. This prevents partisan issues within the SEC. The President designates one of the Commissioners as the agency’s top executive when the current Chair resigns.
Popular belief is that a Republican taking office after the November elections would bode well for crypto. Expectations include the SEC’s crypto enforcement efforts to be reduced significantly, potentially focusing on fraud cases. This is as opposed to charging pure registration violations like crypto trading platforms failing to register as an exchange, broker-dealer, and clearing firm.
Another possible expectation is that the agency would be more open to taking significant crypto-friendly regulatory actions, such as approving more spot ETFs to give investors exposure to more financial instruments.
Under President Joe Biden’s administration, the current US SEC is said to be biased against crypto, as Democrats hold the majority. Besides Pierce, Commissioner Mark Uyeda is the only other Republican within the SEC.
Mark Uyeda Calls Out US SEC for Problematic Rules
Like Pierce, Commissioner Uyeda has also sided with the industry, criticizing the SEC’s approach to crypto disclosure rules as “problematic.” He says Form S-1 filings need updates as they neither facilitate capital formation nor protect investors in their current state.
“The Commission should take steps to ensure that registration statement disclosure is material and informative to prospective purchasers. By the same token, the Commission should avoid requiring disclosures that are irrelevant and distract readers from the important information,” Uyeda wrote.
The critique comes after the financial regulator returned Ethereum ETF S-1 forms to issuers, calling for changes and instructing them to refile by July 8. The action suggests at least one more round of filings before the Ethereum spot ETFs can launch. Head of Government Affairs at Paradigm Alexander Grieve lauded Commissioner Uyeda, underscoring the significance of his statement.
“First time AFAIK Uyeda has been on record calling for a tailored disclosure regime for crypto assets. The SEC under a different admin would be a very different place,” Grieve remarked.
While the market anticipates the ETH ETFs will begin trading on July 4, the timeline hinges on how fast the SEC can review and respond to the issuers’ filings.
Read more: How to Invest in Ethereum ETFs?
Meanwhile, the SEC continues to clamp down on crypto firms. In a post on X, Binance.US highlighted a prolonged legal battle with the regulator. The trading platform expressed its commitment to compliance and criticized the agency’s enforcement tactics.
“On Friday, the Court decided that the SEC’s case against Binance.US will continue. We were prepared for this and look forward to having this case move forward in the judicial process,” read the announcement.
The case concerns securities law violations, offering unregistered investment products, and violating anti-fraud laws. As it prepares for the showdown, Binance.US slammed the SEC’s “regulation by enforcement,” calling out SEC Chair Gary Gensler for being politically motivated.