Crypto Lobby Boosts GOP Effort to Secure Sole Control of SEC

With the waning days of the current congress upon them, Senate Democrats appear to be fighting an uphill battle to secure the renomination of Caroline A. Crenshaw as a commissioner at the Securities and Exchange Commission.

Republican members of the Senate Banking Committee blocked a vote on Crenshaw’s nomination last week. That unfinished business could open the door for the GOP to take sole control of the agency’s leadership come January, with no dissenting voice in place.

Crenshaw, who was nominated by Republican President-elect Donald Trump during his first term and unanimously confirmed by the Senate in 2020, is one of five current SEC commissioners. Democrats Gary Gensler, who has served as chair since 2021, and Jaime Lizárraga have already announced they will resign before Trump’s inauguration on January 20. The terms of Republicans Hester M. Peirce and Mark T. Uyeda do not end until 2025 and 2027, respectively.

Under federal law, commissioners can continue to serve for up to 18 months after their terms expire if they are not replaced before then. Crenshaw has been working on borrowed time since her term officially expired in June. With Gensler and Lizárraga leaving, she will soon be the only Democrat remaining on the commission.

Republicans have been vocal in their opposition to Crenshaw serving another term, with the crypto lobby lending its muscle to the GOP’s efforts to derail her nomination. Crypto advocates have taken issue with Crenshaw’s support for Gensler’s strict oversight of the industry; her opposition to SEC approval of bitcoin spot exchange-traded funds; and her charge that crypto markets are “petri dishes of fraudulent conduct.” The anti-Crenshaw sentiment has been blasted publicly on social media. Additionally, several crypto executives have warned lawmakers they will face political repercussions if they vote in favor of confirming her.

If Crenshaw’s nomination continues to be stalled before the Senate adjourns on December 20, Trump has indicated that he will replace her with a Republican. His likely pick would be Paul Atkins, who is also Trump’s choice to become chair of the SEC, since Crenshaw’s term is expired.

By law, only three of the five commissioners can belong to the same political party. Since Trump is not known for being a stickler for norms, some observers are concerned that he may attempt to appoint the two additional, non-GOP commissioners himself. He could also simply leave the positions vacant.

In a letter to Senators dated December 13, more than 40 consumer advocacy organizations expressed their concern about Crenshaw’s nomination being blocked. They noted that “the reality of a bipartisan SEC” is at stake.

“The incoming Trump administration has signaled they are considering breaking from the tradition that provides for the opposition party to select candidates for the two minority seats,” the letter stated. “If that occurs, we face the possibility that those seats will be vacant, meaning, because of five-year terms, the SEC may be controlled by Trump appointees past the next presidential election.”