President Donald Trump’s campaign to exclude Democrats from U.S. regulatory efforts has created an unusual situation at the two agencies that have the biggest say in how the federal government handles cryptocurrencies: A handful of Republican cryptocurrency advocates are fully in charge of both agencies.
The SEC said goodbye to its lone Democratic commissioner, Carolyn Crenshaw, just last week, removing conventional opposition to its current policy drivers. Crenshaw has frequently warned the agency against a shift toward digital assets, including against Bitcoin exchange-traded funds (ETFs) because of the threat it poses to investors. The consumer protection stance she has taken often extends to those investing in cryptocurrencies.
“I think it’s safe to say that they are speculating, reacting to promoter hysteria, satisfying gambling desires, wash trading to drive up prices, or as one Nobel laureate put it – betting on the popularity of politicians who support cryptocurrencies or stand to benefit from them,” Crenshaw said in a speech last month. Whether or not this backlash within the agency will have an impact on the regulatory direction of the SEC, which is chaired by Trump’s nominee Paul Atkins, is now over. Atkins) and two commissioners who promote cryptocurrency interests, Hester Peirce and Mark Uyeda.
At its sister agency, the Commodity Futures Trading Commission, the new year began with the confirmation of Trump nominee Mike Selig late last month and will be sworn in as chairman on December 22. Acting Chairwoman Caroline Pham took the opportunity to resign from her industry position at MoonPay, leaving Selig alone on the five-member committee.
While this may be a good situation for crypto-friendly policies, the lack of bipartisan slates of commissioners at the CFTC and SEC has become a sticking point for cryptocurrency legislation in the U.S. Senate as Selig moves forward with his yet-to-be-outlined agenda without the need for input or debate from other commissioners.
One of the remaining points of contention about the bill is Democrats’ demand to fill vacancies in both agencies. The bill could establish a U.S. cryptocurrency regulatory regime. It’s unclear how hard Republicans are prepared to go to do this. Trump, for his part, is not that inspiring.
Asked recently if he would accept the Democratic nomination, he responded to a question: “Do you think they would appoint a Republican if it were up to them?”
The historic answer is that presidents from both parties typically advance nominations from both parties at the same time, often in a package negotiated by Congress, thereby receiving multiple confirmations at the same time.
“We do focus on certain areas, we do share power, and I’m open to that,” Trump concluded, leaving the matter in limbo.
Both agency heads were careful not to conflict rhetorically with Trump’s preference not to allow new Democrats to hold regulatory positions, and Selig, the new CFTC chairman, said in his confirmation testimony that he welcomed bipartisan input on the agency but that it was beyond his control.
Atkins noted at the time of Crenshaw’s departure that she “listened carefully, engaged substantively, and worked every day to protect investors and strengthen our markets.”
Currently, both the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission are making progress on cryptocurrency policy. In Pham’s final weeks as interim chair, she pushed for multiple policies, launched leveraged spot cryptocurrency trading on CFTC-registered platform Bitnomial, and established a CEO advisory group. Atkins has called digital assets a top policy priority for his agency, which has dropped cryptocurrency enforcement actions and issued a series of policy statements to clarify its pro-industry digital asset stance in areas as diverse as mining, memecoins, staking and custody.
Both Republican-led agencies have made it clear that they intend to pursue cryptocurrency rules regardless of whether they accept the advice of the law being enacted by Congress.
If Congress does succeed in passing the Cryptocurrency Market Structure Act, and the new law directs agencies to create a slew of new rules and responsibilities, only Republican commissioners will currently be able to enact these permanent regulations.
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