SCOOP: This New Top Pick for SEC Chair Is Pro-Crypto

Plus: Will Trump waive the restriction on federal employees not owning crypto?

Nov 14, 2024

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Hey! I’m Veronica Irwin, Unchained’s regulatory reporter.

Everyone in crypto wants to know one thing: who will Trump pick for SEC Chair?

You’ve probably read the many, many articles published in the past week floating different names. The reason you haven’t heard anything from me yet is because it seems like whose under consideration changes not just daily, but hourly. Things are moving faster than I can write, or than my sources can keep tabs on. One person will tip me off, then the next three folks I talk to will tell me the first person was wrong. It’s a noisy and confusing game of telephone.

But there’s one candidate in particular who seems more likely by the hour, and who you might not have heard about yet. And guess what: he’s very pro-crypto.

The other big news today is the Trump administration may push through a rule change that could allow federal staff to own crypto. More below…

The Trump-Connected Brad Bondi Is a New SEC Chair Contender and Pro-Crypto

The lawyer has represented both Trump and Elon Musk’s companies.

Brad Bondi, Global Co-Chair of Investigations and White Collar Defense at law firm Paul Hastings, is one of several people being considered as president-elect Donald Trump’s appointment to the SEC, three sources connected to either Bondi or indirectly to Trump’s transition team told Unchained. Bondi has emerged as a potential pick this week amidst a flurry of news articles suggesting an array of names in the mix, like former CFTC Commissioner, “Crypto Dad” Chris Giancarlo, Robinhood attorney Robert Stebbins, and former SEC Commissioner Paul Atkins.

Bondi is “well versed in financial regulation of all types, crypto included,” said Ashley Ebersole, General Counsel at blockchain firm 0x and who was Senior Counsel at the SEC from 2015 to 2019. “Brad would also be willing to do the hard work of enacting regulations that allow crypto to continue its growth trajectory and provided [sic] guidelines for enabling this growth to occur without exposing companies and investors to a constant enforcement risk.”

Bondi declined to comment for this story.

At the July Bitcoin 2024 conference in Nashville, Trump promised to “fire” Gary Gensler on day one of his administration, raising hopes that he would replace the unpopular chair with someone who is supportive of the industry’s desire to not be regulated as if it only trades in unregistered securities. According to a source speaking with friends of the transition team, Trump is looking to appoint someone with a contrarian attitude and who is friendly to Wall Street as well as crypto.

The soon-to-be shakeup at the SEC is generating a flurry of news. Gensler hinted that he would be resigning from the Commission soon in a speech at the Practising Law Institute Thursday morning. Also on Thursday morning, Giancarlo posted on X that he was not interested in becoming SEC Chair. “I’ve made clear that I’ve already cleaned up earlier Gary Gensler mess @CFTC and don’t want to have to do it again,” he said. It is unclear how seriously Stebbins and Atkins are currently being considered, with vetting appearing to be in flux.

Though Bondi’s work with crypto firms is not public, two sources close to Bondi say that he has advised several DeFi projects, with one source saying they have personally exchanged crypto trading strategies with Bondi for several years. Since 2008, Bondi has also, through academic papers, been critiquing the SEC’s tendency to rein in industries through scattered enforcement actions, suggesting that he would be prepared to quickly reverse Gensler’s policies.

Aside from crypto, Bondi rises as a likely candidate for SEC chair due to several connections he has with the Trump administration. For example, Bondi represented the SPAC which merged with Truth Social this summer, tying him to Trump’s business interests. Bondi also advised Tesla after it was sued by the SEC for fraud over a tweet from chief executive Elon Musk in which he publicized inaccurate data for its rate of vehicle production, pumping Tesla’s stock price. On Wednesday, Musk was officially appointed to co-lead the new Department of Government Efficiency (DOGE) alongside entrepreneur Vivek Ramaswamy.

Even further, Brad Bondi is the brother of Pam Bondi, a fierce Trump loyalist who defended the former president during the 2020 impeachment trial. Before her brief stint in the White House, Pam Bondi was also the 37th Florida Attorney General. After defending Trump in 2020, she took over leadership of the Trump-focused super political action committee Make America Great Again Action in 2021.

Brad Bondi is a member of the conservative lawyers association The Federalist Society, and, like SEC Commissioner Hester Peirce, he served as General Counsel to former SEC Commissioner Paul Atkins. “If you’re Atkins approved, Atkins trained, that wins you a lot of love with Senate Republicans generally,” said George Mason University law professor J.W. Verrett. Atkins is widely respected in conservative legal circles as well as amongst Senate Republicans.

Verrett, who wrote in July about why he thinks Bondi would be a good choice, said of him: “It’s pretty amazing all the boxes he checks.”

A Degen Administration? Why the Crypto Czar May Be Allowed to Own Tokens

According to sources on the Hill, Trump could be open to waiving a prohibition that federal officials not be allowed to own crypto.

Blockchain industry group The Digital Chamber wrote a letter to Office of Government Ethics (OGE) Acting Director Shelley Finlayson Wednesday requesting that it waive the requirement that federal staff own a “de minimis,” or negligible, amount of cryptocurrency. The restriction, as it stands, severely limits president-elect Donald Trump’s options for the role of Crypto Czar, and sources say his future administration could be open to appointing an OGE director who would waive it.

Cody Carbone, President of the Digital Chamber, said he wrote the letter to “show Trump’s transition team that this is something they should be thinking of.”

Crypto Czar: What and Who

According to two other crypto policy advocates who are not part of the Chamber, there has been chatter on the Hill this week that Trump could be receptive to the idea Carbone and his organization are advocating for. Rumors have circulated since the Bitcoin 2024 conference in Nashville this summer that Trump would hire a Crypto Czar to advise him on policy matters, in addition to or in place of the “Crypto Advisory Council” Trump himself said he would create to help him make legislative and regulatory decisions during a speech at the conference. According to six DC sources who work in crypto lobbying and policy advocacy, Trump is planning to have both a Crypto Czar and Crypto Advisory Council, though top names for either will likely not solidify until later this month after cabinet and Republican party leadership decisions are settled.

However, hiring a Crypto Czar under current ethics rules set by the OGE is significantly more difficult than choosing members of an advisory council. An advisory council could, under these rules — and probably would, according to sources — be made up of successful entrepreneurs in the crypto industry such as the executives of Bitcoin mining companies and other crypto executives already reported to have been meeting with Trump in recent months. A Czar, on the other hand, is not currently allowed to have such obvious conflicts of interest with crypto policy, despite also preferably being someone with extensive experience in Washington politics and a deep understanding of how policy would impact the crypto industry.

Because of this, sources who have spoken with Unchained struggle to even speculate on names for a potential Czar, pointing out that the crypto restriction could elevate candidates that are relatively unknown. One name which has been raised by two different sources and meets the “de minimis” requirement is Blockchain Association Director of Government Relations Ron Hammond, though he would be unusually young for a senior role in the White House at just 31 years old.

Crypto Natives in the Trump Administration?

The letter, however, does not recommend waiving the “de minimis” crypto restriction for just the role of a Crypto Czar — it suggests waiving it for all federal staff roles. This would include the hundreds, if not thousands, of other positions who fall within the category of people who are involved in writing rules for crypto who are currently barred from owning cryptocurrency. Though the rule does not provide a definitive list of agencies which it applies to, it lists examples of restricted roles such as a policy analyst in Treasury or or an employee of the Department of Homeland Security. It also includes, of course, positions at the SEC, where Trump’s potential pick to replace current chair Gary Gensler has engendered ample speculation and advocacy on the behalf of crypto industry representatives. The SEC has struggled in the past to recruit candidates for crypto asset specialist roles due to the requirement.

Trump promised to “fire” Gensler on his first day in office, also at the Bitcoin 2024 conference, though it is unlikely he has the legal authority to do so. Nonetheless, it is widely expected that Gensler will step down either before Trump takes office or after Trump demotes him to a commissioner position, which he has the legal authority to do.

Crypto prices have skyrocketed since the election in part because of a belief that Trump will replace Gensler with someone who is less likely to pursue enforcement actions against crypto companies and open to interpreting securities laws in such a way that crypto companies are not seen broadly as dealing in unregistered securities. Eliminating the requirement that SEC staff do not own cryptocurrency would significantly broaden Trump’s choices on who to appoint as a replacement for Gensler as well as introduce an obvious conflict of interest in that the SEC Chair themself could own crypto while shaping regulation on it.

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