Caroline Crenshaw’s departure from the SEC results in a commission composed entirely of Republicans

Another Departure at the SEC

Yet another member has left the Securities and Exchange Commission. Caroline Crenshaw, who had served as a commissioner since 2020, resigned last Friday. Known for her critical stance on cryptocurrencies, Crenshaw was the final Democrat among the SEC’s senior leadership. In a joint statement, Chair Paul Atkins and commissioners Hester Peirce and Mark Uyeda praised her dedication and commitment to the agency’s mission. Crenshaw’s exit comes after fellow Democrat Jaime Lizárraga stepped down in January 2025.

With her departure, the SEC is now left with three commissioners, all Republicans. By law, no more than three commissioners can belong to the same political party, and appointments are made by the president with Senate approval. Although there is no set timeline to fill the two open seats, several potential candidates have been mentioned, raising questions about the significance of who ultimately fills these roles.

“Some believe the bipartisan structure of the SEC leads to better governance and more meaningful discussions,” said veteran securities attorney Bill Singer. “But in reality, the president’s party typically holds a three-to-two majority.”

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Over 100,000 Messages Sent

Crenshaw’s resignation was anticipated. Although her initial term concluded in June 2024, she remained in her position under a holdover rule. President Joe Biden had nominated her for a second term through 2029, but the Senate Banking Committee did not move her nomination forward, largely due to strong opposition from the crypto sector and its supporters in Congress. Advocates from the Stand With Crypto organization sent over 100,000 emails to senators, urging them to reject her reappointment.

Throughout her tenure, Crenshaw maintained her critical perspective. She voted against the approval of spot Bitcoin ETFs in early 2024, objected to the SEC’s agreement with Ripple Labs in May, and as recently as December, cautioned that tokenized assets are not true equivalents of the underlying securities they represent.

“It’s rare for a single commissioner to challenge the majority and change the outcome,” Singer noted in an interview with Advisor Upside.

Open Seats and Uncertainty

Now Hiring: With two commissioner positions vacant, the question remains as to who will step forward to fill them. Hester Peirce’s term also ended last summer, and she continues to serve under an extension, but she is expected to be succeeded by another Republican.

Potential Democratic Nominees

• Kara Stein, member of the Public Company Accounting Oversight Board
• Erica Williams, former Chair of the PCAOB
• Chris Brummer, professor at Georgetown Law

Despite these possibilities, the influence of a minority-party commissioner is likely to be limited. “It’s hard to see why someone would want to take on the role as a Democratic nominee, knowing their impact would be minimal,” Singer remarked. “And with the private sector thriving, few are eager to leave for a government post at the SEC.”

This article was originally published by The Daily Upside. For more financial advisor updates, market analysis, and professional tips, sign up for our complimentary Advisor Upside newsletter.