WASHINGTON – Gary Gensler, who has served as the Chairman of the U.S. Securities and Exchange Commission, will resign on January 20, coinciding with President-elect Donald Trump’s incoming administration. This marks the conclusion of his notable leadership, which has involved significant confrontations with major financial players and the cryptocurrency sector.

In a statement, Gensler expressed gratitude to President Biden for the opportunity and emphasized that the SEC has fulfilled its mission and enforced regulations impartially during his tenure. Gensler was appointed by Democratic President Joe Biden in 2021.

Known for his assertive approach, Gensler pursued a broad agenda aimed at increasing transparency in financial markets, mitigating systemic risks, and eliminating conflicts of interest on Wall Street. He introduced numerous new regulations, some of which are currently facing legal challenges.

He achieved significant milestones such as improving the resilience and efficiency of U.S. financial markets, accelerating trade settlements, and reforming the $28 trillion Treasury markets. Additionally, he implemented rules aimed at enhancing investor disclosures and corporate governance practices.

Additionally, he successfully enforced rules by Congress that mandated SEC oversight over auditors for U.S.-listed companies from China, which had been a contentious issue for over a decade according to U.S. lawmakers concerned about investor safety.

Under his leadership, the SEC also embarked on a groundbreaking initiative targeting Wall Street’s use of text messages, WhatsApp, and other informal communication methods for business discussions. This led to over $2 billion in fines against numerous firms, including JP Morgan and Goldman Sachs.

Gensler also took decisive action against the cryptocurrency sector, filing lawsuits against exchanges like Coinbase, Kraken, and Binance for not registering with the SEC, which the companies dispute and are contesting in court. The courts have largely supported Gensler’s views in crypto-related cases.

However, his expansive agenda and firm stance met with strong resistance from Wall Street, as well as from Republican members of Congress and even some Democrats.

Organizations such as the U.S. Chamber of Commerce and the Managed Funds Association have challenged several of Gensler’s rules in court, arguing they are unjustifiably overreaching or detrimental to the industry.

Jill Fisch, a law professor specializing in securities regulation at the University of Pennsylvania, noted that while Gensler achieved some successes, he will leave with a mixed record. “There are certainly some wins, but his aggressive regulatory strategy may not be fully sustained going forward,” she commented.

Transition Ahead

A significant setback for the SEC occurred in June when the Fifth Circuit ruled that the agency lacked authority over the vast $27 trillion private funds sector. This verdict and other legal challenges have slowed the agency’s progress this year and may impede its capabilities in the future, according to Reuters.

Just prior to Gensler’s announcement, a federal judge in Texas invalidated the SEC’s recent updates to Treasury dealer regulations.

Some critics argue that Gensler’s push against cryptocurrencies was poorly conceived and detrimental to U.S. innovation, pushing crypto initiatives out of the country—a point Gensler dismisses. He argues that effective securities regulation generates trust and encourages innovation in the market.

Trump has not yet disclosed who will succeed Gensler, but it is anticipated that he will appoint one of the present Republican commissioners, either Hester Peirce or Mark Uyeda, as the interim leader of the SEC.

Additionally, reports indicate that Trump’s transition team may consider former SEC officials for a permanent role.

The next head of the SEC is expected to quickly halt the crackdown on cryptocurrencies, reassess many of Gensler’s regulations, discontinue ongoing enforcement actions, and aim for regulatory changes that foster capital growth.