Blockchain advocacy group demands SEC Chair Gary Gensler resign after election defeat

Blockchain advocacy group CEDAR Innovation Foundation has called on the Securities Exchange Commission Chair Gary Gensler to resign. In a statement dated November 18, the group accused Gensler of defying tradition by refusing to announce his resignation.

According to the group, Gensler is clinging to power, contrary to what his predecessors have done. The group noted that Gensler’s decision to ignore the precedent of past SEC chairs resigning once the administration that elects them is voted out shows that he is unwilling to accept change.

The group noted that the last three chairs resigned within 2-3 weeks of the election. Mary Schapiro, who Barack Obama appointed, announced her resignation on November 26, 2012, and stepped down on December 14, 2012. Mary Jo White also quit the chair position on January 20, 2017, after announcing resignation plans on November 14, 2016, a few weeks after Donald Trump’s first win.

Even Trump-appointed Chair Jay Clayton announced his resignation on November 16 after Trump lost to Joe Biden and left the post on December 23. The group is now calling for Gensler to follow suit immediately by announcing his resignation and leaving the position.

The CIF wrote:

“While each of his three predecessors respected this process by announcing their intentions to step down promptly, Gensler is clinging to his position, defying tradition and accountability.”

The group further noted that it was not the only one calling for Gensler to leave. Several other groups, including the American Securities Association and Consumer Action for a Strong Economy, and individuals such as former SEC official John Reed Stark and billionaire investor Mark Cuban, have called on Gensler to resign

Will Gensler step down?

Despite the calls from several quarters asking Gensler to resign, there are no clear signs yet on whether he intends to leave the post. However, there are signs that he will leave the position, with industry observers picking the hints in his public statements.

In a recent speech at the Practicing Law Institutes program, Gensler discussed his administration’s challenges and achievements, including how his agency dealt with the crypto industry. He also hinted at leaving, noting that he would leave the rest of the regulations to others.

In his closing remarks, the SEC Chair acknowledged the work of the SEC staff, noting:

“It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.”

Many believe this statement signifies a farewell, especially after he also noted that he is on his legacy tour.

Many in the crypto community believe his legacy will be historically infamous. A group of retail investors recently wrote an open letter to Gensler, noting that his tenure will go down as one of the worst in recent financial history.

The letter highlighted several instances of what it considers to be Gensler’s SEC filings, including the Ripple XRP case and the Debt Box case. It described it as an unforgettable tenure personified by “arrogance, incompetence, and obsessive crusade against innovation.”

They added:

“You have managed to embody everything wrong with unchecked regulatory power, leaving behind a legacy of shattered trust and billions in lost value.”

Others appear to share this view, with CIF also criticizing Gensler’s legacy tour and noting that he does not need one and should simply resign.

Who will replace Gensler?

Meanwhile, one of the questions that remains unanswered is “Who will replace Gensler?”

While several names have been mentioned, there have been no nominations. Potential options include Robinhood chief legal officer Dan Gallagher and former acting comptroller of currency Brian Brooks. Former SEC commissioner Paul Atkins and current commissioners Hester Pierce and Mark Uyeda have also been mentioned as replacements.

However, according to the predictions market, Brooks currently has the best odds of being selected. Kalshi gives Brooks a 48% chance of selection, Gallagher has a 25% chance, and Uyeda has only 5%. Still, it is too early to tell who will get the role, even though everyone believes it would be a crypto-friendly tenure.

It is possible that Gensler’s delay in announcing his resignation is why Trump has not nominated a pick for the position. Although Trump promised to fire Gensler on his first day in office, the president only has the legal power to remove an SEC chair for inefficiency, neglect of duty, and malfeasance. However, the president can demote Gensler to the commissioner and replace him with another commissioner until his term officially runs out in June 2026.

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