SEC and CFTC Vacancies Leave Crypto Rulemaking to Few Officials
Leadership vacancies at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have left regulatory authority over the $3 trillion cryptocurrency market in the hands of just three officials. At the SEC, only Chair Paul Atkins and Commissioner Mark Uyeda remain after the recent departure of Commissioner Hester Peirce. Meanwhile, Michael Selig is currently the sole Senate-confirmed commissioner and chair at the CFTC. Both five-member agencies are stepping up efforts to establish digital asset rules after lawmakers failed to pass a comprehensive market structure bill.
To prevent paralysis during rulemaking, the SEC updated its quorum rules in October to allow a single commissioner to establish a quorum when only two are serving and one is disqualified or recused. This change enables one official to potentially advance regulatory decisions that apply to broad financial markets. Both agencies have already moved forward with regulatory proposals, including SEC safe harbor provisions for token offerings and CFTC exchange oversight rules, using existing statutory authorities in place of congressional legislation.
Market participants are monitoring whether the White House will nominate candidates to fill the empty seats at both regulatory agencies. Attention also remains on Congress and the Digital Asset Market Clarity (CLARITY) Act. However, analysts expect little movement on the bill during the upcoming lame-duck legislative session before a new Congress takes office in January.
Key points
- Leadership vacancies leave the SEC with two commissioners and the CFTC with one commissioner out of five expected seats each.
- A revised SEC rule allows a single commissioner to form a quorum if only two are serving and one must recuse themselves.
- Regulators are proposing new rules for cryptocurrency exchanges and token safe harbors following stalled legislation in Congress.
- Congress remains stalled on the CLARITY Act, with little expectation of legislative progress before January.
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How we writeDisclaimerQuestions and answers
How many commissioners are currently serving at the SEC and CFTC?
The SEC currently has two serving commissioners out of five seats, while the CFTC has only one Senate-confirmed commissioner and chair.
What is the SEC new quorum rule for crypto rulemaking?
The SEC revised its quorum rules so that if only two commissioners are in office and one is recused or disqualified, a single commissioner can establish a quorum to pass agency rules.
What is the status of the CLARITY Act in Congress?
Congress has not passed the CLARITY Act, and observers do not expect lawmakers to vote on the digital asset legislation during the lame-duck session before January.