With Donald Trump’s return to the presidency, the leadership of the U.S. Securities and Exchange Commission (SEC) may soon undergo a significant change. Trump has promised a shake-up that includes removing the current SEC Chair, Gary Gensler, which could open new doors for the U.S. crypto market—particularly for Ether (ETH) and spot Ether ETFs with staking rewards.
Trump’s SEC Shake-Up and Gensler’s Potential Departure
President-elect Trump’s campaign included a strong commitment to restructuring financial regulation, particularly when it comes to cryptocurrency. He has criticized Gensler’s leadership style, known for its stringent “regulation-by-enforcement” approach, and vowed to replace him “on day one.” However, removing the SEC chair isn’t straightforward. While a president can appoint and remove certain officials, legal experts note that an SEC chair’s removal usually requires justifiable cause, such as inefficiency, neglect, or misconduct, to avoid political or legal backlash.
Andrew Rossow, a digital media attorney, highlighted that Trump may not be deterred by potential challenges, given the frustration among crypto industry leaders regarding the SEC’s restrictive stance on digital assets. Trump’s bold approach to political norms may add weight to his pledge.
Alternative Routes to Replace the SEC Chair
Carol Goforth, a professor specializing in securities regulation, points out that Trump could pursue a quicker alternative: reassigning the chair position to another commissioner without removing Gensler from the SEC entirely. This could happen immediately, as the president has authority under Reorganization Plan No. 10 to shift leadership within the agency. Historically, however, SEC chairs often resign during presidential transitions, which could simplify the process.
If Gensler does step down, Trump would need Senate approval to appoint a new chair. This step could be expedited by the recent Republican win in the Senate, likely ensuring smoother confirmation for a crypto-friendly successor.
What a New SEC Chair Could Mean for Ether and ETFs
The potential appointment of a more crypto-supportive SEC leader could reshape the U.S. crypto industry, particularly with respect to ETH. Under Gensler, the SEC has often treated staking as a potential security offering, which limited options for crypto-focused exchange-traded funds (ETFs). A pro-crypto chair could take a more flexible stance on this issue, allowing ETF providers to offer staking rewards to investors.
For Ether, the introduction of ETFs with staking benefits would create more investor incentives, potentially raising demand and driving up prices. Staking offers investors the chance to earn rewards by validating transactions on the Ethereum network, which could make ETH-linked ETFs more appealing and spur inflows from both retail and institutional investors.
Could Trump’s Pro-Crypto Agenda Transform the Industry?
If Trump successfully replaces Gensler, the U.S. crypto market could experience a regulatory shift that encourages innovation. A pro-crypto SEC could ease regulatory constraints on crypto products, encourage institutional investment, and foster a more competitive landscape for the U.S. in global digital finance. For Ether, this shift could drive both market growth and ETF inflows, potentially raising its value and positioning it as a more stable and mainstream investment asset.
