You Don’t Always Get What You Want: Stebbins May Be SEC Chair

The U.S. crypto industry has made bold bets in recent years, pouring millions into pro-crypto Congressional campaigns to help shape the regulatory landscape. However, in focusing almost exclusively on Congressional influence, the industry may now face a situation it had hoped to avoid: the appointment of Robert Stebbins as the next SEC Chair. Stebbins, a figure associated with the Hinman speech that cleared Ethereum while leaving XRP and other assets in regulatory limbo, is seen as a polarizing choice for crypto advocates.

Despite the crypto industry’s growing clout, this moment serves as a reminder that strategic investments in political influence can’t afford to overlook the presidency. A broader, more balanced approach might have yielded a different outcome in the SEC Chair race.

Stebbins: A Polarizing Figure for Crypto

Stebbins’ tenure as SEC General Counsel from 2017 to 2021 coincided with some of the most controversial actions in crypto regulation. Most notably, he is linked to the infamous Hinman speech, which declared Ethereum "sufficiently decentralized" and exempt from securities laws, while leaving XRP and other cryptocurrencies under a cloud of uncertainty. For Ripple and much of the crypto community, Stebbins represents a continuation of an adversarial regulatory approach that they hoped to leave behind.

If appointed, Stebbins is unlikely to back down from the enforcement-heavy strategy that characterized his time at the SEC. This prospect has fueled concerns that his leadership could stifle innovation and prolong the regulatory ambiguity that has plagued the crypto industry.

Jay Clayton’s Influence Looms Large

One key factor in Stebbins’ potential appointment is the outsized influence of Jay Clayton, former SEC Chair and a trusted figure in the Trump administration. Rumored to be working closely with the Trump transition team, Clayton’s endorsement could carry significant weight in determining the next SEC Chair.

While Clayton’s relationship with the crypto industry has been contentious, his experience and connections make his input invaluable to the administration. If Clayton views Stebbins as a qualified and reliable choice, Ripple and other crypto firms may find it difficult to sway the decision.

Crypto’s Congressional Strategy

The crypto industry has taken a long-term approach, betting heavily on Congressional races to secure favorable regulatory outcomes. Super PACs like Fairshake have raised over $200 million to support pro-crypto candidates, focusing on key Senate and House races. This strategy has already borne fruit in shaping committees like the House Financial Services Committee and the Senate Banking Committee, which could play a pivotal role in drafting crypto legislation.

However, by prioritizing Congressional influence over the presidential race, the industry may have inadvertently limited its leverage at this critical juncture. Without direct contributions to President Trump’s campaign, the crypto industry has less sway in influencing high-level appointments like the SEC Chair.

A Missed Opportunity in the Presidential Race

More substantial contributions to the presidential race could have paid dividends now. Supporting the administration directly might have increased the industry’s ability to advocate for a Chair more aligned with their vision, such as Paul Atkins or Dan Gallagher. Both Atkins and Gallagher are known for their balanced approach to regulation, with a focus on innovation and fairness, making them preferred candidates for the crypto sector.

By contrast, Stebbins’ potential appointment signals the administration’s prioritization of continuity and legal rigor over appeasing the crypto industry. It also highlights the limitations of the industry’s Congressional-first strategy in a system where executive appointments wield significant power.

The Role of Congress in Shaping Crypto’s Future

While the SEC Chair remains an influential position, Congress has the ultimate authority to define the regulatory landscape. Pro-crypto lawmakers, emboldened by industry support, could:

• Establish clear definitions for crypto assets, reducing the SEC’s enforcement discretion.

• Limit the SEC’s jurisdiction over cryptocurrencies, granting more authority to the CFTC or creating a new regulatory body.

• Draft comprehensive legislation to address stablecoins, DeFi, and digital asset custody.

If these efforts succeed, the impact of the SEC Chair on the crypto industry could be significantly diminished, regardless of who holds the position.

Lessons for the Future

This moment serves as a learning opportunity for the crypto industry. While betting on Congressional races is a sound long-term strategy, future efforts should consider a more balanced approach that includes presidential influence. With the presidency holding significant sway over regulatory appointments, direct contributions to presidential campaigns could help align the administration’s priorities with the industry’s needs.

Conclusion: A Test of Strategic Patience

If Robert Stebbins becomes the next SEC Chair, the crypto industry will face a test of its resilience and strategy. While his appointment may not align with the industry’s immediate goals, the groundwork laid in Congress could eventually deliver the clarity and protections the sector seeks. For now, the lesson is clear: you don’t always get what you want, but with the right strategy, you might still get what you need.

Follow me on X @ https://x.com/jungleincxrp

Subscribe to my YouTube @ https://www.youtube.com/@jungleinc

Contact me at jungle@jungleincxrp.com