U.S. Securities and Exchange Commission (SEC) chair Gary Gensler could be nominated to the position of Treasury Secretary if Kamala Harris wins the U.S. presidential elections, the Washington Reporter said on Aug. 19.

The self-described right-of-center news outlet cited unnamed senior Senate staffers, adding that the rumors support past statements from top Republicans.

The Washington Reporter added that Republican Senate staff expect senators in their own party to oppose such a nomination.

Democratic representatives are expected to support Gensler’s nomination. The Reporter anticipated that Democratic Representatives Elissa Slotkin and Ruben Gallego would cast confirmation votes for Gensler. The two have supported arguably strict crypto regulation but have received funding from the pro-crypto Fairshake PAC.

The Reporter also suggested that Gensler could step down in time for Joe Biden to elect a new SEC chair prior to the U.S. elections in November.

Paradigm CLO Katie Biber speculated that Biden could nominate a new SEC chair, such as Caroline Crenshaw, who currently serves as an SEC commissioner. In turn, Gensler could serve the SEC as a commissioner. However, such a plan is far from guaranteed, and one source said this course of events is only likely if Harris promises Gensler the future position of Treasury Secretary.

Impact on the Crypto Sector

Gensler’s leadership of the SEC has been controversial because of his strict regulatory stance toward the cryptocurrency sector.

Gensler has affirmed that most cryptocurrencies qualify as securities, bringing those assets under the SEC’s jurisdiction. Though the SEC often aims to protect investors, Gensler’s SEC has also launched lawsuits against popular crypto exchanges such as Coinbase, Binance, Kraken, and numerous others.

Accordingly, the possible nomination of Gensler as Treasury Secretary could lead to greater scrutiny of the crypto industry, and any government position that Gensler holds is likely to be controversial among crypto holders.

Under Gensler’s leadership, the Treasury could potentially expand the scope of its crypto policies, targeting a greater number of crypto platforms and individuals while compelling U.S. companies to comply by blocking and rejecting related transactions.

Even without Gensler’s involvement, the Treasury and its Office of Foreign Assets Control (OFAC) have targeted numerous cryptocurrency platforms in recent years. The Treasury was involved in a multi-agency settlement with major crypto exchange Binance in November 2023. OFAC has also sanctioned several popular coin mixers, including Tornado Cash and related individuals. The Department of Justice (DOJ) often pursues criminal charges and penalties simultaneously.