SEC shrinks to two commissioners as new quorum rule could centralize crypto decisions
Two commissioners remain after Peirce's exit
Hester Peirce's resignation took effect on Oct. 2, leaving the SEC with just two commissioners: Chairman Paul Atkins and Commissioner Mark Uyeda. Her departure letter was dated Sept. 21, and the SEC's updated commissioner roster confirms the change.
That leaves fewer people making Commission-level decisions on crypto policy. The SEC also activated a quorum amendment on the same day that could let either remaining commissioner act alone in certain situations.
How the new quorum rule works
The amendment, dated Sept. 30 and effective Oct. 2, changes the rule that defines how many commissioners must be eligible to conduct business. Previously, the SEC could operate with fewer than three commissioners already in office. Two seats being filled was enough.
The new exception goes further: it allows a single eligible commissioner to form a quorum when every other sitting member is disqualified from a particular matter. That disqualification must be specific to the case at hand. A commissioner simply disagreeing with a proposal does not count.
In practice, if Atkins were disqualified from a matter, Uyeda could constitute the quorum — and the same would apply in reverse.
Custody reform and offering proposals are still in progress
On Oct. 1, the SEC proposed new custody rules for regulated investment companies and registered advisers holding crypto assets. Atkins listed custody reform alongside a separate offering regime as part of the agency's crypto work. Public comments on the custody proposal are due by Dec. 7.
A second pending measure, Regulation Crypto Assets, was issued Aug. 18 and published Aug. 21. It would create offering exemptions for certain investment contracts involving crypto assets, along with disclosure requirements and continuing antifraud obligations. It also proposes a conditional safe harbor for investment-contract status.
Neither of these proposals has become final rule. A proposed framework does not grant permission.
Tokenized-stock relief is already active
A Sept. 17 Innovation Exemption issued a temporary conditional exemptive order covering specified tokenized National Market System stock trading venues and certain liquidity providers. The order provides five years of conditional relief with limits on stock symbols and trading volume. Participants must provide equivalent shareholder rights, maintain publicly auditable smart contracts, and make operating disclosures. If a stock token is issued by a third party unrelated to the issuer, the issuer must be notified and given a chance to object.
Why this matters
With only two commissioners and a new rule allowing one member to form a quorum when the other is disqualified, future Commission decisions on crypto policy will rest with a smaller body and could be made by a single commissioner in certain cases. That raises the question of who ultimately shapes the regulatory direction for crypto assets.
What is still unclear
It remains to be seen how the SEC will handle situations where both commissioners could face disqualification on the same matter, or how the agency balances speed of decision-making against reduced deliberation with fewer members.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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