Republicans Take Control of SEC and CFTC in Crypto Regulation

The cryptocurrency industry is experiencing a major shift in regulation. Simultaneously, the Securities and Exchange Commission and the Commodity Futures Trading Commission are now led by the most crypto-supportive leaders, with little attention paid to the remaining Democratic commissioners. This is an exciting moment for the industry, but also a significant opportunity for Democrats to offer a counter-perspective on the regulatory landscape.

The Arrival of New Crypto-Friendly Leaders

Last week, Caroline Crenshaw — the last Democratic voice on the Securities and Exchange Commission — left her position. Her departure means that the SEC is now fully led by industry supporters of digital assets.

Paul Atkins, who was appointed chairman of the SEC by President Donald Trump, has become the primary regulator. Alongside him are commissioners Hester Peirce and Mark Uyeda, both long-time advocates of crypto innovation. At the Commodity Futures Trading Commission, Mike Selig — another Trump appointee — received confirmation to serve as chairman last month and took office in December.

The speed of this change has left only one Democratic figure — Caroline Pham, the former acting chairman of the CFTC — without the power to oversee regulatory actions. Additionally, Pham has left to join the crypto firm MoonPay, leaving fewer prospects for Democratic influence in regulatory decisions.

The Problem of a One-Sided Perspective in Regulatory Power

For Democratic senators involved in legislation regarding the crypto market structure, the situation is becoming critical. The lack of Democratic representation in the two main regulatory agencies means there is no coordinated opposition to policies issued by the crypto-friendly leadership.

Caroline Crenshaw was a regular voice raising alarms about SEC steps toward embracing digital assets. She opposed Bitcoin ETF approvals and consistently advocated for retail investor protection. Her statements went as far as saying: “It’s safe to say they are speculative, responding to hype from promoters, feeding the desire to gamble, engaging in wash trading to push prices, or betting on the popularity of supportive politicians.”

Now, there is no similar critical voice remaining at the SEC or CFTC.

The Speed of Crypto-Friendly Policy Implementation

Despite the lack of Democratic input, both agencies are rapidly advancing a pro-crypto agenda. Paul Atkins immediately identified digital asset regulation as “job one” for the SEC. The SEC has already issued numerous policy statements clarifying their stance on mining, memecoins, staking, and custody arrangements.

At the CFTC, former acting chair Caroline Pham advanced measures such as leveraged spot crypto trading on the platform Bitnomial before leaving. The new leadership has continued these efforts and added a CEO advisory council to work directly with crypto executives.

Both agencies recently clarified their stance on tokenized stocks. The SEC issued guidance indicating that tokenized securities remain subject to existing securities and derivatives rules, regardless of the blockchain technology used. More specifically, the regulator distinguished between issuer-sponsored tokenized securities (which may represent actual equity ownership) and third-party products that merely provide synthetic exposure.

The Congressional Dilemma and the Future of Bipartisan Representation

A critical point in the crypto market structure bill shared by the Senate is the question: Who will write the permanent regulations? If passed, the implementation details will be solely the responsibility of Republican commissioners without Democratic checks.

President Trump has not yet indicated willingness to appoint Democratic commissioners to these agencies. When asked, he responded: “Do you think they will appoint Republicans if they decide?” The historical precedent is that presidents from both parties regularly offer nominees from different parties, often as part of package deals negotiated in Congress.

But for now, there is no clear plan for that. Mike Selig stated in his confirmation hearing that he is open to bipartisan input, but the decision is no longer in his hands. Paul Atkins, meanwhile, has contributed most to the SEC framework through his policy statements and continues to push forward with strong crypto advocacy.

The result is a regulatory landscape where agencies are simultaneously moving in a pro-crypto direction without significant Democratic counterweight or debate from diverse perspectives. For the industry, this could lead to faster innovation and clarity. For those concerned about consumer protection and market stability, it presents a major opportunity to influence policy.