Supreme Court overturns 91-year precedent, lets Trump fire SEC and CFTC commissioners
In brief
- Supreme Court ruled 6-3 that Trump can fire FTC Commissioner Rebecca Slaughter and agency heads at will, overturning 91-year precedent.
- SEC and CFTC commissioners can now be dismissed for almost any reason, with Federal Reserve governors as sole exception.
- Senate Democrats demand ethics language restricting Trump's crypto ventures before supporting Clarity Act, due early August.
A Century-Old Guardrail Removed
The precedent being overturned was set during the Franklin Delano Roosevelt administration and had lasted nearly a century. Trump and future presidents will be able to fire commissioners at the SEC and CFTC at any time, for almost any reason. The lone exception: Federal Reserve governors remain protected. Trump called the decision transformational.
The ruling arrives at a moment when crypto regulation hangs in the balance. Rebecca Slaughter's husband is VP of policy at Paradigm, a venture capital firm in the crypto industry, and that job allowed the couple to fund Slaughter's lawsuit all the way up to the Supreme Court.
Immediate Implications for Crypto Regulation
The SEC currently features three Republican commissioners and zero Democrats. The CFTC features only a lone Republican chairman. Trump has already flexed his authority by refusing to appoint Democrats to the SEC and CFTC, which are both supposed to feature two minority-party commissioners.
This composition matters enormously for the Clarity Act, a bill that would formally legalize most crypto activity in the United States and grant sweeping authority to the SEC and CFTC to regulate crypto markets. Most stakeholders involved with the bill agree it must be passed by early August to stand a chance of becoming law.
Senate Democrats are leveraging what little power they have. Senate Democrats previously emphasized they would not support the legislation unless Trump committed to appointing Democrats to the SEC and CFTC. They've also staked out ethics language restricting Trump's crypto ventures as a red line. Trump told Decrypt in December that he was "open" to appointing Democrats to federal agencies, but in the six months following that statement, he made no such appointments.
GOP Senate leadership signaled an intention to force a floor vote on the Clarity Act next month. The clock is ticking.
