- Dan Gallagher is a favourite to lead the SEC under Trump, sources say.
- The Robinhood exec has criticised the regulator's recent approach to crypto.
- Gallagher said he could draft crypto legislation "over the weekend with a six-pack of beer and a pizza.”
Robinhood Chief Legal Officer Dan Gallagher is a favourite to become the next Chair of the Securities and Exchange Commission, should Donald Trump return to the White House.
That’s according to a dozen former top regulators, lobbyists and securities lawyers who spoke with Politico’s Morning Money on Monday.
Gallagher, who previously served as an SEC Commissioner between 2011 and 2015, has been outspoken about what he calls the SEC’s “scorched earth” approach to crypto regulation.
For too long, millions of Americans who wish to participate in crypto have had to “contend with innovation-killing federal regulatory uncertainty,” he said at a September hearing.
Should Gallagher get the job, he could drastically shift the tone at the regulator from the widely-criticised “regulation by enforcement” approach to a more conciliatory one.
But there’s a lot of uncertainty. Even if Trump wins the presidency and picks Gallagher, there’s no guarantee he will accept the role.
“Don’t wish that upon me,” Gallagher said when asked what he would do if he were the head of the SEC on a Bloomberg Intelligence podcast in July. “That’s a thankless job.”
Doing things differently
Despite Gallagher’s reservations, he’s got some strong ideas for what he would do regarding crypto regulation were he to become the head of the SEC.
“I’d go in with a pretty lengthy list of things that need to be undone and undo them,” he said in the same Bloomberg Intelligence podcast. “I’d give serious thought to walking away from a lot of bad litigation.”
Gallagher didn’t specify what litigation he was referring to.
But there’s no shortage of potential cases. The SEC has filed around 100 lawsuits against crypto firms since 2021.
Adding to them, the SEC charged Ethereum developer Consensys for offering unregistered securities sales through its MetaMask staking service in June, and threatened to sue NFT marketplace OpenSea in August.
The regulator is also weighing a lawsuit against Gallagher’s own firm, Robinhood, over its crypto trading platform.
“We’ve been forgoing revenue for the company by not going hog wild listing coins, and I think that puts us in a very, very unique position,” Gallagher told Morning Money, commenting on the potential suit. “Shooting at the good guys is a really bad policy.”
If he were in charge, Gallagher said he would create a rulebook tailored for crypto based on existing securities laws.
“They should’ve done it in 2021,” he said. “If they had done it in 2021 they might have caught FTX before it blew up on everyone.”
Perhaps the most biting comment was Gallagher’s assertion of how easy drafting a crypto rulebook would be amid his admonishment of the SEC.
“I could do it over the weekend with a six-pack of beer and a pizza,” he said.
Who is Dan Gallagher?
Gallagher is no stranger to the inner workings of the SEC.
He started his career at the regulator where he was a summer honours programme intern while pursuing his law degree.
After graduating and working as a law firm associate in the private sector, he rejoined the SEC in 2006, rising the ranks to become a Commissioner in 2011. He returned to the private sector in 2015, and joined Robinhood in 2020.
It was while navigating the aftermath of the meme stock mania of early 2021, to which Robinhood was central, that Gallagher says he became critical of the SEC’s approach regulation.
Power play
It’s not just the SEC’s approach to crypto that’s ruffled Gallagher.
In January 2021, a coordinated social media campaign helped push up the stock of Gamestop nearly 700%. In response, the SEC drafted legislation to reform parts of the stock market which it viewed as responsible for the extreme volatility.
“The predicate for these rules is based on a false narrative,” Gallagher said.
He called the SEC’s notion that the way financial markets are set up is the problem and that giving regulators more power would fix things “garbage.”
Much of the criticised legislation — both inside and outside of crypto — lies at the feet of SEC Chair Gary Gensler, who was appointed by the Biden administration in 2021.
Gensler’s questionable performance as SEC head has led many crypto industry insiders to call for his resignation.
Even Trump, whose presidential campaign has veered into crypto in recent months, said he would fire Gensler immediately if he wins the presidency.
Gallagher hasn’t shied away from criticising Gensler. He’s yet to call for the SEC Chair’s resignation.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
