SEC’s Shrinking Roster and New Rule Reshape Crypto Policy Power

The U.S. Securities and Exchange Commission (SEC) has seen a significant reduction in its active commissioners, dropping from three to just two following Hester Peirce’s resignation on October 2. This leaves Paul Atkins and Mark Uyeda as the remaining commissioners. A new rule, effective the same day, allows a single eligible commissioner to constitute a quorum when all other members are disqualified from a specific matter. This change could concentrate future crypto policy decisions in fewer hands.

The new rule, amending 17 CFR 200.41, clarifies that a single commissioner can act as the Commission’s quorum if others are disqualified from a particular issue. This distinction ensures that vacancies, nonattendance, and recusal are not treated as interchangeable. The SEC justified the amendment as promoting flexibility and finality in its operations, though it emphasizes that this does not grant additional substantive authority.

Several key crypto-related measures remain pending, including the custody reform proposal issued on October 1 and Regulation Crypto Assets, proposed in August. The SEC also granted conditional relief for tokenized-stock trading in September. While the smaller Commission body may influence future decisions, the legal constraints and procedural requirements remain in place. The next deadlines for public comments on these proposals are October 20 for the offering rule and December 7 for the custody rule.

The reduced number of commissioners does not alter the existing voting or legal authority structures. The SEC’s seriatim rule ensures that decisions are not final until all members have reported their votes. The smaller body will still be subject to judicial review and must adhere to notice-and-comment requirements for rulemaking.