Dan Gallagher Emerges as Potential SEC Chief Under Trump, Advocates for Crypto Regulation Reform

Dan Gallagher is a strong candidate to lead the SEC if Donald Trump returns to the White House. Sources, including former regulators and securities lawyers, shared this insight with Politico’s Morning Money.

Gallagher, currently the Chief Legal Officer at Robinhood, has been vocal about his criticism of the SEC's recent approach to cryptocurrency. He even joked that he could draft crypto legislation "over the weekend with a six-pack of beer and a pizza."

He served as an SEC Commissioner from 2011 to 2015. During that time, he saw firsthand the challenges facing crypto regulation. He believes the SEC's current strategy is too harsh, calling it a “scorched earth” approach. Many Americans want to engage with crypto, but they’re held back by regulatory uncertainty.

If Gallagher takes the helm, he could change the SEC's tone. Instead of a “regulation by enforcement” model, he might adopt a more collaborative approach. However, there are uncertainties. Even if Trump wins, Gallagher may not accept the role. He remarked, “Don’t wish that upon me,” when asked about leading the SEC on a podcast.

Despite his reservations, Gallagher has ideas for reform. He wants to undo many of the SEC's recent decisions. “I’d go in with a pretty lengthy list of things that need to be undone and undo them,” he said. The SEC has filed around 100 lawsuits against crypto companies since 2021, so there’s plenty to address.

For example, in June, the SEC charged Consensys, an Ethereum developer, for unregistered sales related to its MetaMask staking service. They also threatened legal action against NFT marketplace OpenSea. Additionally, they’re considering a lawsuit against Robinhood regarding its crypto trading platform. Gallagher commented, “Shooting at the good guys is a really bad policy.”

Gallagher believes in creating a clear rulebook for crypto, based on existing securities laws. He feels this should have been done in 2021, stating, “If they had done it in 2021, they might have caught FTX before it blew up.” He confidently claimed, “I could do it over the weekend with a six-pack of beer and a pizza.”

Gallagher knows the SEC well. He started as an intern while studying law. After working in a law firm, he returned to the SEC in 2006 and became a Commissioner in 2011. In 2015, he moved back to the private sector and joined Robinhood in 2020. His experience during the meme stock craze in early 2021 made him critical of the SEC's regulatory approach.

It’s not just about crypto for Gallagher. He also criticized the SEC's response to the Gamestop stock surge in January 2021, which saw a nearly 700% increase due to a social media campaign. He argued that the SEC's proposed reforms were based on a “false narrative.” He believes that simply giving regulators more power won’t solve the underlying issues.

Much of this controversial legislation falls under the leadership of SEC Chair Gary Gensler, appointed by the Biden administration in 2021. Gensler's performance has drawn criticism from many in the crypto industry, with calls for his resignation. Trump has even stated he would fire Gensler if elected again. While Gallagher has criticized Gensler, he hasn’t called for his resignation yet.