Crypto firms, riding a wave of optimism following Donald Trump’s re-election and a Republican-controlled Senate, are advocating for a change in the SEC chair. They argue that fresh leadership at the SEC could ease regulatory actions against the crypto industry and provide a more favorable operating environment.
Ripple and Coinbase Call for Regulatory Reform at SEC
Stuart Alderoty, Ripple’s chief legal officer, argued that the approach by the current leadership of the SEC has been overly bureaucratic and restrictive.
He added that “policy is people, and people is policy,” emphasizing that a change in the SEC could lead to a more logical regulatory approach. Ripple is hopeful that the incoming administration will provide an opportunity to address issues at a policy level rather than in courtrooms.
This call for reform follows years of regulatory difficulties under the current SEC chair, Gary Gensler, whose administration has taken a hardline stance on digital assets. Under Gensler, the SEC has consistently classified numerous crypto assets as securities, leading to multiple enforcement actions.
Ripple argues that its ongoing litigation with the SEC will likely cost the firm $200 million in legal fees. Hence, it highlights the need for regulators to adopt a different approach that better aligns with legislative solutions rather than continuous courtroom battles.
Coinbase, another leading player in the crypto space, has also urged for a change in SEC. Coinbase and Ripple were significant financial contributors to pro-crypto candidates in the recent election, underscoring their investment in the political landscape to push for changes at the SEC.
Speculation on the Next SEC Chair
Trump’s campaign included a pledge to replace the SEC chair, which has fueled speculation about a possible successor. One name that stands out is SEC Commissioner Hester Peirce, or “Crypto Mom” for her pro-crypto stance.
Peirce has consistently voiced concerns over the regulatory body’s enforcement-driven approach, suggesting that regulatory policy should encourage innovation rather than stifle it. Her stance has earned her respect among crypto advocates who see her as a potential ally if she were to take the role of SEC chair.
While Gensler’s term is set to end in 2026, the president can remove him, though a replacement would require Senate confirmation. Notably, Gensler has acknowledged the president’s role in selecting the SEC chair, conceding that such changes are part of the democratic process.
New SEC Chair May Revamp Ether ETFs
After openly criticizing Gensler’s crypto stance, Trump will likely appoint a new SEC chair, opening the door for Ethereum (ETH) exchange-traded funds (ETFs) to offer staking rewards. Such a shift could significantly enhance Ether’s appeal among institutional and retail investors, leading to a price spike.
Even though Trump’s administration has promised to replace Gensler, legal experts indicate that directly firing an SEC chair isn’t straightforward. Attorney Andrew Rossow explained that while Trump can demote the SEC chair, outright dismissal would require a just cause, such as inefficiency or neglect, to avoid political fallout.
A New Chair Could Enable Staking for Ether ETFs
A crypto-friendly SEC chair could reshape the regulatory barriers currently constraining Ether ETFs. Despite initial inflows, the Ether ETF market has underperformed compared to Bitcoin ETFs.
Unlike BTC ETFs, which saw significant inflows after launch, Ether ETFs have struggled due to regulatory constraints on staking—a key attraction for Ethereum investors.
Staking Rewards Could Boost Ether ETFs’ Appeal
Market researcher Tom Wan suggested that ETF issuers could leverage staking yields to offset management fees, making Ether ETFs more appealing. With fees ranging from 0.15% to 2.5%, introducing staking rewards could reduce or eliminate these costs.
For investors, a modest 1% staking yield could position ETH ETFs as a compelling alternative to BTC funds. However, shifting the regulatory approach to staking wouldn’t be without challenges.
A complete policy reversal would require support from other SEC commissioners, even though the SEC chair can influence the commission’s decisions.
