If re-elected, former President Donald Trump might have the authority to remove SEC Chair Gary Gensler, a figure he has criticized in the past. During a recent Bitcoin conference, Trump pledged to "fire" Gensler, the current chair of the U.S. Securities and Exchange Commission, a position he has taken heat for among the blockchain community.

Why This Matters

Trump's promise to remove Gensler highlights ongoing tensions between the blockchain industry and regulatory bodies. However, there is no historical precedent for a president directly firing an SEC chair. Typically, SEC chairs resign when a new president takes office, allowing the incoming administration to appoint a new leader. This customary practice could prevent Trump from fulfilling his promise if Gensler chooses to remain in his role until the end of his term in 2026.

Legal and Historical Context

Despite the absence of precedent, legal experts suggest that Trump could indeed remove Gensler if re-elected. According to UCLA Law Professor Stephen Bainbridge, the president has the authority to remove SEC chairs based on a 1950 policy and supporting case law. Bainbridge's confidence in this interpretation is high, citing a 95% likelihood that Trump could execute such a move.

Andrew Vollmer from the Mercatus Center at George Mason University concurs, pointing to previous Supreme Court rulings that support the president's authority to remove appointees under the faithful execution clause of the Constitution. Nonetheless, the legality of such actions remains somewhat ambiguous and subject to interpretation.

The Structure of the SEC

The SEC is designed to be an independent federal agency with a five-member commission, including the chair, all of whom are nominated by the President. Commissioners serve five-year terms, but the chair's position, designated by the President, is more influential. Gensler, appointed by President Joe Biden in 2021, would typically be expected to step down if a new president comes into office.

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Implications for Trump’s Agenda

Even if Trump cannot directly remove Gensler, appointing a more favorable commissioner could serve as a symbolic victory for his Bitcoin-supporting base. The roles of SEC chair and commissioner are distinct, but shifting the chairmanship to someone more aligned with Trump’s views on cryptocurrency could fulfill his promise in a different way.

The Bottom Line

While the prospect of Trump removing Gensler is legally possible, it hinges on several factors, including Gensler's willingness to step down and the nuances of presidential authority. The distinction between the roles of commissioner and chair means that even if Gensler remains, Trump could still influence the SEC’s direction by appointing a more crypto-friendly chair.