SEC’s Shrinking Roster Shifts Crypto Policy Power to Two Commissioners
The U.S. Securities and Exchange Commission (SEC) now operates with only two commissioners after Hester Peirce’s resignation on October 2. The remaining members are Paul Atkins and Mark Uyeda, leaving future crypto policy decisions in fewer hands. A new rule, effective the same day as Peirce’s departure, allows one eligible commissioner to form a quorum when others are disqualified from a specific matter. This means either Atkins or Uyeda could make decisions on crypto matters if the other is disqualified.
The new quorum rule, amended on September 30, modifies 17 CFR 200.41 to permit a single commissioner to act as the quorum in cases where other members are disqualified. This change aims to ensure the SEC can continue operations despite disqualifications, promoting flexibility and finality in administrative matters. Peirce’s resignation letter expressed confidence in Atkins, Uyeda, and SEC staff to balance individual choice with regulatory protections.
Pending crypto measures include the October 1 custody proposal, which addresses how regulated investment companies can custody crypto securities and related modernization requirements. Public comments on this proposal are due by December 7. Another measure, Regulation Crypto Assets, issued in August, proposes offering exemptions for certain crypto investment contracts. Additionally, the Innovation Exemption provides temporary relief for tokenized stock trading, with specific conditions and safeguards.
The reduced number of commissioners does not grant additional substantive authority or insulate decisions from judicial review. Future crypto policy actions will depend on which matters arise, who remains eligible to consider them, and the decisions they make. The next key milestones for crypto businesses include the October 20 comment deadline for the offering rule and the December 7 custody deadline.