As Gary Gensler’s term as SEC chairman nears its conclusion, the financial world is abuzz with speculation about the agency’s future direction. Gensler’s leadership has been characterized by stringent crypto regulations, often criticized for stifling innovation in the digital currency space. Amidst this backdrop, Ripple’s CEO, Brad Garlinghouse, has voiced strong opposition to Robert Stebbins, a chief candidate to succeed Gensler.
Ripple’s Legal Chief Joins the Fray
Brad Garlinghouse is not alone in his disapproval. Ripple’s Chief Legal Officer, Stuart Alderoty, has also raised alarms about Stebbins, cautioning that his leadership could mirror the controversial tenure of former SEC Chair Jay Clayton. Stebbins’ past includes the approval of numerous cryptocurrency cases under Clayton, raising concerns that his appointment might usher in an era of aggressive enforcement in crypto regulation.
Stebbins Sparks Industry Concerns
The possibility of Stebbins leading the SEC is causing unease within the industry. Many perceive him as closely linked to the SEC’s prior controversies, especially regarding perceived bias in crypto regulation. Critics argue that his involvement in pivotal decisions, such as William Hinman’s 2018 speech declaring Ethereum a non-security, questions his impartiality as a regulator. Garlinghouse labeled the potential appointment of Stebbins as “unconscionable,” fearing it could undo progress towards regulatory clarity.
Former SEC official John Reed Stark reported that Stebbins personally sanctioned around 80 crypto-related enforcement actions during Clayton’s tenure. Reports indicate Clayton, who recently assumed the role of Manhattan’s top federal prosecutor, is actively supporting Stebbins’s candidacy for SEC Chair.
Crypto attorney John Deaton likened Stebbins to “Clayton 2.0” in terms of regulatory stance. Deaton highlighted potential repercussions, stating, “Choosing Bob Stebbins, especially with Clayton heading the SDNY, is essentially adopting a Clayton 2.0 approach regarding crypto. We’ve been there and done that.”
A Frontrunner Emerges
In contrast, Dan Gallagher, Robinhood’s Chief Legal Officer, is gaining traction as a leading candidate for the SEC Chair position. Prediction market Kalshi estimates a 61% chance of Gallagher’s appointment. Many in the crypto community view Gallagher as a potential shift away from the SEC’s current enforcement-heavy tactics, which have been criticized for hampering innovation.
The contest for the next SEC Chair underscores the significant divisions over how the agency should regulate cryptocurrencies. For Ripple and its allies, Stebbins’ appointment would signify a regression, rekindling disputes over favoritism and the urgent need for transparent guidelines. The SEC’s leadership decision is now eagerly awaited.
Who Could Go Lighter on Crypto?
After enduring a challenging few years, the crypto industry may be longing for a break. Some in the crypto sphere are advocating for SEC Commissioner Mark Uyeda. Uyeda has consistently opposed Gensler’s stringent measures, urging for more adaptable policies. Proponents of a lighter regulatory approach see Uyeda as a potential leader who could enable the crypto market to flourish by providing it with the necessary space to expand.
