In a developing story from Politico, a potential clash between Wall Street’s regulator and Robinhood Crypto is looming. As the Securities and Exchange Commission (SEC) prepares to scrutinize Robinhood’s cryptocurrency operations, chief legal officer Dan Gallagher is emerging as a leading candidate to head the SEC should Donald Trump secure another term as president.
Potential SEC Chair Candidates
As the political landscape shifts, with crypto at the forefront of the upcoming election, Gallagher’s candidacy for SEC chair signals a potential return to the government-industry door, reminiscent of the early Trump administration.Â
In a scenario where former President Trump secures the seat in the Oval Office, there is certainly a greater chance of positive regulatory change for the industry, which has been characterized by inappropriate actions and lawsuits, with Robinhood being one of the last firms targeted by the agency this year.Â
Other names mentioned by Politico for the role include former Commodity Futures Trading Commission (CFTC) chairman Chris Giancarlo, known as “CryptoDad”, and current SEC commissioner Hester Peirce, who has been a vocal supporter of innovation and a new regulatory framework for the crypto industry.
Robinhood CLO Pledges Crypto Reform
Gallagher has long been seen as a preferred choice among Republicans. Representative Bill Huizenga (R-Mich.) praised Gallagher’s qualifications, noting the importance of thoughtful leadership that is not driven solely by ideology. Despite this, the Politico report notes that Robinhood’s CLO could face a contentious confirmation process.Â
Democrats have previously expressed skepticism about industry insiders leading federal regulators, especially given Robinhood’s “controversial history”, including its actions during the GameStop trading frenzy in 2021. However, Gallagher insists that the company has since improved its compliance and risk management protocols.
Gallagher’s vision for the SEC reportedly includes a more tailored approach to cryptocurrency regulation, advocating a basic registration regime for crypto exchanges and brokers. He believes that if he had been in charge in recent years, the SEC would have already established clearer, more supportive regulations for the industry.
Featured image from DALL-E, chart from TradingView.com
