A major overhaul is about to change the American regulatory landscape, and it will all have a lot to do with incoming President Donald Trump and his favorite official to determine the future direction of the SEC.
Richard Farley a seasoned partner at leading New York law firm Kramer Levin Naftalis & Frankel, has made a name for himself on Wall Street with his experience in high-stakes finance, especially in leveraged finance.
A Trump handpick?
As co-head of Kramer Levin’s Leveraged Finance Group, Farley has advised private credit companies on a variety of complex issues that led him to best contender for the position of chairman with the U.S. Securities and Exchange Commission.
According to reports, Farley has been shortlisted by Donald Trump’s transition team to become the new SEC chairman in place of outgoing incumbent Gary Gensler.
Trump eyes Richard Farley for nomination as chairman of the SEC
Trump is rumored to be considering Richard Farley, a top Wall Street lawyer, for the role of leading the SEC.
With this replacement, we could see a shift from Gensler’s anti-crypto incursions to a pro-crypto stance that… pic.twitter.com/YnDauyExhG
— Mario Nawfal’s Roundtable (@RoundtableSpace) November 8, 2024
Strong political ties and GOP alignment
There’s more to Farley’s candidacy than his Wall Street background; he also has a significant number of political connections. Farley’s wife, Chivacci “Chele” Farley, was once the finance chairman of the Republican Party in New York City and is an elected official who ran for office as a Republican, making the Farley family a conservative team.
Although Farley himself was originally a Democrat, he has recently shifted his support to the Republican Party, another connection to Trump’s inner circle. The introduction to Robert F. Kennedy Jr., a staunch supporter of Trump and likely administration appointee, adds a new layer to his political relationships and increases the possibilities for the role in the SEC.
Shifting SEC Priorities and Crypto Posture
The Trump administration said it would like to rebalance the SEC’s mission toward basic consumer protection, moving further away from Gary Genslerwhose regulatory approach has been harsh on the sector, at least on cryptocurrency issues.
Gensler was appointed by President Joe Biden in January 2021 and will serve until January 5, 2026, but the president can fire him early if there is good cause. Naturally, Donald Trump’s camp showed a crony preference for cryptocurrency-friendly SEC chairmen as it sided with relaxed crypto regulatory standards.
Farley has not made any public statements about crypto, but by all indications the prospect of him taking over has sparked interest among those who want pro-crypto policies.
Other candidates and implications for future SEC leadership
Farley is among a handful of finalists for the position, each of whom would add a certain flavor to regulatory policy. Other frequently mentioned candidates include DanGallagher Chief Legal Officer at Robinhood and former Commissioner of the SEC; Chris Giancarlo, former chairman of the Commodity Futures Trading Commission, who is considered relatively friendly to digital assets; and Hester Peirce, the current commissioner of the SEC, who has been advocating for a crypto-friendly perspective for years.
The SEC’s last chairman could certainly determine the course the agency will take regarding regulating digital assets, and this has far-reaching implications for the future of the industry.
Featured image from CNBC, chart from TradingView