SEC Chair Candidate Stebbins Could Revive ‘Regulation by Enforcement’ Era

Ripple CEO Brad Garlinghouse has expressed concerns about the potential appointment of Bob Stebbins as chair of the securities regulator.

The industry executive responded to a post on X by crypto researcher ‘Anders’ who described Stebbins as “the old guard candidate for the SEC chair” before adding:

“If Trump truly wants to make the US the crypto capital, Stebbins should be out of the question.”

Garlinghouse agreed, commenting that from a group of strong candidates for SEC Chair, “it’s unconscionable to consider someone directly involved in Bill Hinman’s unethical (likely illegal) push to pick winners and losers in crypto.”

“Choosing Stebbins would be akin to bringing us back to the start of the regulation by enforcement era.”

In a group of strong candidates for SEC Chair, it’s unconscionable to consider someone directly involved in Bill Hinman’s unethical (likely illegal) push to pick winners and losers in crypto.

Choosing Stebbins would be akin to bringing us back to the start of the regulation by…

— Brad Garlinghouse (@bgarlinghouse) November 19, 2024

One Step Forward, Two Back?

Robert Stebbins is one of several candidates to take over from Gary Gensler as head of the SEC under the new administration. During his tenure as general counsel at the agency, he played a crucial role in advising on over 85 rules and overseeing more than 2,750 enforcement actions, according to legal firm Willkie, where he is currently a partner.

He also assisted Trump’s SEC chair, Jay Clayton, in assembling his team when he took office in 2017.

“He literally signed off on over 80 crypto-related enforcement actions and preferred not to have ETH declared a non-security,” said former candidate John Deaton, who advised Donald Trump “not make the big mistake of picking Stebbins,” adding:

“Stebbins argued it’s better to not provide clarity and leave it vague in order to allow the SEC maximum discretion to attack it later. That’s disgusting and exemplifies why we need a reformer.”

Messari founder Ryan Selkis said, “A securities law maximalist might get the SEC nod, and it’s no bueno for crypto,” before adding, “We can’t screw this one up again.”

I was feeling good yesterday, and now not so good.

A securities law maximalist might get the SEC nod and it’s no bueno for crypto.

We can’t screw this one up again.

cc: @DonaldJTrumpJr @RobertKennedyJr https://t.co/kXxvizT6oT

— Ryan Selkis (d/acc) (@twobitidiot) November 19, 2024

Better Options

Other potential SEC chair candidates include the industry’s preferred choice, Hester Peirce, also known as “crypto mom.” There is also Robinhood CLO and former commissioner Dan Gallagher and Paul Atkins who was a part of Trump’s 2016 transition team, also previously serving as an SEC commissioner.

Another SEC commissioner, Mark Uyeda, and former CFTC Chairman Heath Tarbert are also potential outsiders.

Last week, Gary Gensler remained steadfast in his regulation by enforcement policies but hinted that he might step down soon.

“Gary Gensler himself has said ‘democracies have consequences’ —this one is no exception. His three most recent predecessors resigned within weeks of the election. Gensler should follow their lead and announce his plans to step down immediately. Instead, he’s clinging to power, parading around on a so-called ‘legacy tour’ while his failures pile up and his credibility crumbles,” stated the Cedar Innovation Foundation.

It’s time for Gary Gensler to resign. #ResignGary pic.twitter.com/1XF2e0lDRQ

— CEDAR Innovation Foundation (@CIFonX) November 18, 2024