President Donald Trump’s campaign to exclude Democrats from U.S. regulatory work has created an unusual situation within the two agencies that will have the most say in how the federal government manages crypto: A handful of Republican crypto advocates are entirely in charge of both.
The U.S. Securities and Exchange Commission just bid farewell to its only Democratic commissioner, Caroline Crenshaw, last week, removing any usual opposition to its current policies. Crenshaw had often warned the agency about moving toward digital asset adoption, including opposing Bitcoin exchange-traded funds (ETFs) as a danger to investors. It has taken a consumer protection stance that regularly extends to those investing in crypto.
“I think it’s safe to say that they are speculating, reacting to promoter hysteria, feeding a desire to gamble, washing trades to drive up prices, or, as one Nobel laureate posited, betting on the popularity of politicians who support or will personally benefit from crypto’s success,” Crenshaw said in a speech last month. Whether or not such vocal opposition within the agency has any effect on the SEC’s regulatory direction, it’s over now, and the regulator is led by Trump-appointed Chairman Paul Atkins and two commissioners who had championed crypto interests, Hester Peirce and Mark Uyeda.
At its sister agency, the Commodity Futures Trading Commission, the new year begins with a new leader, as Trump nominee Mike Selig won confirmation late last month to be sworn in as president on December 22. Acting chair Caroline Pham took the opportunity to leave the company for an industry role at MoonPay, leaving Selig alone on the five-member commission.
While this may be a good situation for pro-crypto policy, as Selig moves forward with his yet-to-be-defined agenda without needing input or debate from his fellow commissioners, the lack of a bipartisan slate of commissioners at the CFTC and SEC has become a sticking point for crypto legislation in the U.S. Senate.
One of the remaining points in the debate over the bill that could establish a U.S. crypto regulatory regime is Democrats’ demand that their party’s vacancies be filled at both agencies. It’s unclear how much Republicans are willing to give in on this. For his part, Trump was not very enlightening.
When recently asked if he would be willing to nominate Democratic nominees, he responded with a question: “Do you think they would nominate Republicans if it were up to them?”
The historical answer is that presidents of both parties have routinely made nominations from both parties, often in deals negotiated in Congress that result in multiple confirmations at once.
“There are certain areas that we look at and certain areas that we share power, and I’m open to that,” Trump concluded, leaving the issue in uncertain waters.
Both agency heads have been careful not to go rhetorically against Trump’s preference not to allow new Democrats to take on regulatory roles, with new CFTC chief Selig saying in his confirmation testimony that he would welcome bipartisan input at the agency, but that it is not up to him.
Atkins noted upon Crenshaw’s departure that she had “listened carefully, engaged substantively, and reached out every day with the goal of protecting investors and strengthening our markets.”
For now, the SEC and CFTC have made progress on crypto policy. In the final weeks of Pham’s interim presidency, she pushed several policies, launched leveraged spot cryptocurrency trading on the CFTC-registered Bitnomial platform, and established a panel of CEO advisors. And Atkins has called digital assets a top policy priority within his agency, which has abandoned crypto enforcement measures and issued a series of policy statements to clarify its industry-friendly stance on digital assets in areas as diverse as mining, memecoins, staking and custody.
Both Republican-led agencies have made it clear that they intend to enforce the crypto rules with or without input from the law Congress is working on.
If Congress manages to pass the Crypto Market Structure Bill and the new law directs agencies to a list of new rules and duties, the drafting of these permanent regulations would currently be in the hands of Republican commissioners alone.
Read more: Most influential: Paul Atkins
