Trump brings pro-crypto SEC and CFTC leaders
Regulatory uncertainty in the crypto world is heating up, and the latest controversy has thrown Ethereum (ETH) into the spotlight. A recent letter from Republican lawmakers to SEC Chairman Gary Gensler and FINRA CEO Robert Cook raises questions about Prometheum Capital's escrow service for ETH. The twist? The SEC previously pointed out that ETH is not a security, and Prometheus classified it as one, causing confusion. Is this a regulatory failure – or something bigger? Trump, on the other hand, plans to bring pro-crypto leaders into power at the SEC and CFTC.
Promethium's ETH Protection: Bold Move or Regime?
In May 2024, Promethium launched a security service for ETH, calling it “crypto asset security”. This bold claim directly conflicts with the SEC's approval of Ethereum ETFs, which considers ETH a security. Lawmakers argue the contradiction is a sign of deeper regulatory gaps.
Adding to the confusion, Promethium's ability to provide these services appears to use vague SEC guidelines for special purpose broker-dealers (SPBDs). As per the rules, SPBDs only hold collateral. By publicly declaring ETH secure, Promethium effectively muddies the waters. Critics say this stifles innovation and leaves investors unsure of how to navigate the market.
Republicans take aim: Who's behind the push?
The letter, led by Rep. John Rose and signed by GOP lawmakers such as French Hill, Mike Flood, Dustin Johnson and William Timmons, will not back down. He accuses Gensler's leadership of creating “chaos and confusion” in the digital assets space. As John Rose clearly states, “Players in the digital assets space certainly deserve it.
Adding to the drama, reporter Eleanor Terrett shared insights on the leadership changes at the SEC. Charles Gasparino reports that Dan Gallagher, one of the possible names for Gensler's replacement under the Trump administration, has privately indicated that he is unlikely to take the role, although that could change based on political developments. Another name in the mix is Matthew Stebbins, who has close ties to former SEC chairman Jay Clayton. Rumor has it that Clayton has been pushing Stebbins for the nomination.
Meanwhile, Gensler's future is on the rise. Some believe he may resign in January 2025, frustrated by the growing criticism. If he steps down, names like Dan Gallagher, Brad Bondi and Paul Atkins—known for their pro-crypto leanings—are being floated as possible replacements. Trump in 2016 They will be graduating on January 20, 2025, and Garry may be disembarked on this date.
What is expected?
This letter isn't just a call for answers — it's part of a broader push to shift crypto regulation in a more creative direction. There is also talk of a Trump administration-backed transfer of oversight from the SEC to the CFTC. Such a change could mean clearer regulations for projects like Ethereum, but it would require significant financial support and political will.
For now, the market is waiting. Promethium's actions have raised urgent questions, and Ethereum's regulatory status is unclear. Whether Gensler stays or goes, one thing is certain: the crypto world is hungry for transparency, and the stakes couldn't be higher.
