Supreme Court Says Trump Can Fire SEC, CFTC Commissioners at Will—At a Crucial Moment for Crypto

The U.S. Supreme Court on Monday overturned a landmark ruling forcing presidents to fire federal agency commissioners only in extraordinary circumstances—undoing nearly a century of precedent and granting President Donald Trump even more authority over key regulatory areas including crypto.

In a 6-3 decision, the court’s conservative majority affirmed Trump’s right to fire Rebecca Slaughter, a Democratic FTC commissioner, clarifying he now has the right to terminate other agency commissioners at will—with the exception of Federal Reserve governors.

The case had direct ties to crypto, given Slaughter’s husband is VP of policy at industry venture juggernaut Paradigm. That job allowed the couple to fund Slaughter’s lawsuit all the way up to the Supreme Court, Decrypt previously reported.

Trump v. Slaughter overturns a longstanding precedent, set during the first years of the Franklin Delano Roosevelt administration, which prevented the president from firing agency commissioners except in extreme cases of neglect of duty or malfeasance. 

“Today’s historic Slaughter decision by the Supreme Court is the greatest increase in presidential power in the last 100 years,” the president said Monday in a social media post. “Such a monumental ruling at such an important time!”

Now, Trump—and future presidents, too—will be able to fire commissioners at key regulators like the SEC and CFTC at any time, for almost any reason. This development grants the executive branch substantial new powers over the direction of such agencies, which were long considered to be independent.

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. The SEC currently features three Republican commissioners and zero Democrats; the CFTC features only a lone Republican chairman.

The issue became a flashpoint in the yearlong battle to pass the Clarity Act, a bill that would formally legalize most crypto activity in the United States. Senate Democrats previously emphasized that they would not support the legislation—which would grant sweeping authority to the SEC and CFTC to regulate crypto markets—unless Trump committed to appointing Democrats to both agencies.

The president then told Decrypt in December that he was “open” to the idea. In the intervening six months, however, he has made no such appointments.

Monday’s Supreme Court ruling further complicates the issue, given that Trump could now theoretically appoint Democrats to federal agencies and then fire them at any point thereafter.

The decision comes as the Clarity Act faces a climactic do-or-die push after over a year of starts and stops. Most stakeholders involved with the bill agree it must be passed by early August to stand a chance of becoming law, given the looming November midterm elections.

Numerous issues beyond regulator independence still stand in the legislation’s way, chief among them the president’s potential willingness to sign off on ethics language restricting his numerous lucrative crypto ventures. Senate Democrats have staked out such language as a red line. Earlier today, GOP Senate leadership signaled an intention to force a floor vote on the Clarity Act next month, whether Democrats are ready or not.