Gary Gensler’s tenure as SEC chairman is coming to an end. His tenure was marked by a strict stance on crypto regulation and a sheer disruption to innovation. Ripple CEO Brad Garlinghouse has taken a strong stance against Robert Stebbins, a top contender to replace SEC Chair Gary Gensler.

Garlinghouse criticized Stebbins for his role in the controversial decisions during his tenure at the SEC, particularly those tied to William Hinman’s 2018 speech that declared Ethereum a non-security. According to Garlinghouse, appointing Stebbins would signal a return to what he calls the “regulation by enforcement era.”

Ripple’s Legal Chief Joins the Fray

Garlinghouse wasn’t alone in his criticism. Ripple’s Chief Legal Officer, Stuart Alderoty, also expressed concerns about Stebbins, warning that his leadership would mirror the controversial tenure of former SEC Chair Jay Clayton. Stebbins’ history includes approving numerous cryptocurrency cases under Clayton, fueling speculation that he would continue a similar enforcement-heavy approach to regulating crypto.

Stebbins Sparks Industry Concerns

However, the industry is taking a negative stance over Stebbins’ candidacy. Many view him as a figure tied to the SEC’s past controversies, particularly around perceived favoritism in crypto regulation. Critics argue that his involvement in key decisions, such as Hinman’s speech, undermines his credibility as a neutral regulator. Garlinghouse called the potential choice of Stebbins “unconscionable,” emphasizing that such a move would harm the progress made in regulatory clarity. 

According to former SEC official John Reed Stark, Stebbins personally approved around 80 cryptocurrency-related enforcement actions during his time under Jay Clayton’s leadership. Reports suggest Clayton, recently appointed as Manhattan’s top federal prosecutor, is actively pushing Stebbins’s candidacy for SEC Chair.

Crypto attorney John Deaton compared Stebbins to “Clayton 2.0” in terms of regulatory stance. Highlighting the potential repercussions, Deaton said, “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

Meanwhile, Dan Gallagher, Robinhood’s Chief Legal Officer, is emerging as the leading candidate to take over as SEC Chair. Gallagher has garnered a 61% chance of being appointed, according to prediction market Kalshi. Many in the crypto space view Gallagher’s potential appointment as a step away from the SEC’s current approach, which has been criticized for stifling innovation through enforcement actions.

The battle over the next SEC Chair highlights the deep divisions in how the agency should approach cryptocurrency regulation. For Ripple and its allies, Stebbins’ appointment would be a step backward, reigniting debates over favoritism and the need for clearer guidelines. All eyes are now on the SEC as it navigates this pivotal leadership decision.

Who Could Go Lighter on Crypto?

Crypto does deserve a break after a harrowing couple of years. Some in the crypto world are hoping for SEC Commissioner Mark Uyeda. Uyeda has pushed back against Gensler’s strict approach, calling for more flexible policies. Those favoring a lighter regulatory hand see Uyeda as someone who could help the crypto market thrive by giving it room to grow.

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