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WASHINGTON, DC JANUARY 9: U.S. President Donald Trump looks on during an event to unveil … [+]
Donald Trump will soon return to the White House, riding a wave of promises and unprecedented financial support from the well-organized and equally well-funded cryptocurrency industry. Trump declared his intention at Bitcoin 2024 to transform the U.S. into the “crypto capital of the world.” Those pro-crypto promises led to over $135 million in campaign contributions. Central to that promise is firing Securities and Exchange Commission Chair Gary Gensler and lifting the regulatory fog hanging over the digital asset space.
But Trump’s audacious promises face the reality of governance—a process often slow, complex, and resistant to political expediency. Checks and balances. A governance feature, not a bag. The stakes couldn’t be higher—not just for the crypto industry but for the credibility of his administration. Delivering results swiftly will require navigating legal constraints, bureaucratic inertia, and an impatient donor base. Here’s how Trump might begin to make good on the promises that fueled the crypto industry’s fundraising frenzy.
The Tall Order Of Removing Gary Gensler
Gensler has become a polarizing figure in the crypto world. Known for his aggressive enforcement tactics, he is both celebrated and criticized for his regulatory approach. Crypto enthusiasts blame his leadership for the lack of clear compliance pathways, a sentiment echoed by SEC Commissioner Hester Peirce. In a recent Wharton lecture, Peirce described the SEC as fostering “instability, uncertainty, and fear” under Gensler, stifling innovation and driving businesses offshore.
Trump’s pledge to fire SEC Chair Gary Gensler on “day one” is legally impossible under the Securities Exchange Act of 1934, which protects Commissioners from removal without cause, such as inefficiency or malfeasance—none of which apply to Gensler. Although unlikely, even if demoted, Gensler could remain an SEC Commissioner until 2026, potentially stalling meaningful progress.
Acting Leadership, A Trumpian Shortcut
During his first term, Trump often used acting appointments as a shortcut to avoid Senate confirmation battles. With over 30 acting agency heads during his first presidency, this strategy allowed him to swiftly install loyalists. Under the Federal Vacancies Reform Act (FVRA), acting appointments are limited to 210 days.
While acting officials offer flexibility, they often lack the legitimacy and authority of Senate-confirmed leaders. This can undermine their ability to implement lasting reforms. Additionally, decisions made by acting leaders are more susceptible to legal challenges, further complicating efforts to advance a pro-crypto agenda.
The U.S. federal government comprises approximately 4,000 political appointments made by the president. Of these, about 1,200 positions require Senate confirmation, accounting for roughly 30% of all presidential appointments. With Republicans now controlling the Senate—the chamber responsible for confirming many presidential appointees—Trump may encounter fewer obstacles in securing confirmations this time. However, the crypto industry’s demand for immediate action could make acting appointments an attractive interim solution while permanent nominees are finalized.
Why Recess Appointments Miss The Mark
In a November 10th Truth Social post, Trump floated the idea of using Senate recess appointments to bypass confirmation requirements for key positions. Recess appointments allow temporary placement in roles during Senate recesses but come with significant drawbacks. Lacking Senate approval, appointees often face diminished authority, reduced legitimacy, and temporary tenure that ends with the next Senate session or sooner if the nominee is rejected. This instability can hinder agency effectiveness, morale, and external confidence. Additionally, recess appointments are controversial and prone to legal challenges, adding to the uncertainty. For critical roles like SEC Chair, this approach prioritizes speed over stability, making it an unreliable solution for lasting reforms.
Can An Executive Order Solve The Issue?
The short answer is no. An executive order cannot grant the president authority to remove Gensler or other independent agency heads. For example, Executive Order 13957, issued by Trump in 2020 and later rescinded by President Biden, sought to reclassify certain federal positions for easier removal. However, it could not—and did not—override the statutory protections safeguarding independent regulatory agencies like the SEC.
Legislation and landmark Supreme Court decisions, such as Humphrey’s Executor v. United States (1935), ensure that agency heads like Gensler can only be removed for cause, such as inefficiency, neglect of duty, or malfeasance. These legal safeguards protect the independence of regulatory bodies, making it highly unlikely that an executive order could bypass them. Even if Trump were to reissue a similar directive, it would face significant legal challenges and likely be overturned. His promise to “fire Gensler on day one” remains more campaign rhetoric than actionable reality.
A High-Stakes Gamble For The Crypto Industry
The crypto industry is no stranger to a big bet. No risk, no reward. The crypto industry’s unprecedented financial support during the 2024 election cycle underscores its high expectations. Industry leaders anticipate a pro-crypto pivot, regulatory clarity, and policies that encourage innovation rather than stifle it. Coinbase CEO Brian Armstrong heralded the new Congress as “the most pro-crypto Congress ever,” reflecting the industry’s optimism about its influence.
Trump stoked these expectations with bold and bombastic proposals, including creating a U.S. Strategic Bitcoin Reserve and prioritizing domestic bitcoin mining. “If crypto is going to define the future, I want it to be mined, minted, and made in the USA,” Trump declared at the Bitcoin 2024 conference. But lofty promises alone won’t satisfy a demanding donor base. As Commissioner Peirce cautioned, effective reform requires more than rhetoric; it demands structured policy frameworks and formal rulemaking under the Administrative Procedure Act (APA). This process involves public input, transparency, and the potential for legal challenges, all of which take time.
So What Can Trump Do?
With legal and procedural constraints in mind, Trump’s administration must explore alternative strategies to implement its crypto agenda.
Appoint Crypto-Friendly Commissioners
As vacancies arise on the SEC, Trump can nominate Commissioners aligned with his vision for the crypto industry. By reshaping the SEC’s internal dynamics, this approach could gradually steer policy in a more industry-friendly direction.
Push Legislative Reforms
Proposals like the SEC Stabilization Act, which would restructure the agency by replacing the Chair role with a bipartisan executive committee, offer a more durable solution. Republican control of Congress would increase the likelihood of such reforms passing.
Promote Regulatory Experimentation
Peirce’s concept of “regulatory sandboxes” could allow crypto firms to innovate under defined conditions without fear of enforcement actions. This approach balances oversight with the flexibility needed for technological advancement.
Promises Versus Process
The crypto industry’s demand for swift action often clashes with the slow realities of governance. Project 2025, the Heritage Foundation’s roadmap for a conservative administration, outlines ambitious goals for Trump’s first 180 days, including reclassifying digital assets as commodities instead of securities. However, achieving such reforms requires significant legislative and administrative coordination, which inherently takes time.
Similarly, Agenda 47, Trump’s broader policy platform, emphasizes reducing regulatory burdens but offers little detail regarding the SEC. While these frameworks highlight priorities, they lack concrete action plans, leaving much unresolved until Trump takes office.
Even under a unified government, durable regulation through the Administrative Procedure Act (APA) requires agencies like the SEC to solicit public input, consider feedback, and withstand legal scrutiny, often extending timelines beyond the industry’s expectations.
A Moment Of Reckoning
Trump’s promises to fire Gensler and revamp the SEC underscore his brash leadership style but also reveal the constraints of governance. While the crypto industry, emboldened by its record-breaking campaign investments, expects swift results, the incremental nature of regulatory processes may frustrate an industry that is long on bitcoin but short on patience.
Ultimately, the path forward requires a combination of strategic appointments and legislative collaboration. For Trump, the key lesson is that bold promises must yield to the realities of governance, where lasting change depends on navigating legal and procedural hurdles. For the crypto industry, the takeaway is that while a supportive administration is crucial, enduring progress will be shaped by the processes that turn promises into actionable policy.