The SECâs anti-crypto grip falters as Commissioner LizĂĄrraga and Chair Gensler exit, clearing the path for a pro-crypto revolution in U.S. markets.
SECâs Anti-Crypto Stance Wavers as Another Key Resignation Hits
U.S. Securities and Exchange Commission (SEC) Commissioner Jaime LizĂĄrraga has announced his intention to step down from the agency on Jan. 17, 2025. In a statement issued on Nov. 22, LizĂĄrraga explained that his decision was driven by family priorities as his wife, Kelly, faces significant health challenges. He wrote:
Until my departure in January, I will remain fully engaged in the Commissionâs ongoing work and activities. I donât yet know what comes next, but I do know that it has been a great honor to serve as SEC Commissioner.
After 34 years in public service, he emphasized the need to focus on his familyâs future while expressing hope for Kellyâs full recovery. He thanked President Joe Biden for his nomination and reflected on his time at the SEC as a profound honor.
LizĂĄrraga praised SEC Chair Gary Gensler for exceptional leadership and commended his fellow commissioners for their collaborative spirit. Highlighting the agencyâs crucial role in maintaining the integrity of U.S. capital markets, LizĂĄrraga underscored the achievements accomplished under Genslerâs agenda.
Gensler has also announced his resignation effective Jan. 20, 2025, coinciding with President-elect Donald Trumpâs inauguration. Genslerâs tenure was marked by a stringent regulatory approach toward the cryptocurrency industry, initiating enforcement actions against major exchanges such as Binance, Coinbase, and Kraken. His departure aligns with Trumpâs campaign promise to remove Gensler and foster a more crypto-friendly regulatory environment.
The SEC has five commissioners, including the Chair. Two Commissioners, Hester M. Peirce and Mark T. Uyeda, are Republicans, while Caroline A. Crenshaw and LizĂĄrraga are Democrats.
LizĂĄrraga advocates for stronger regulation of the cryptocurrency market, citing its unregulated nature as a key driver of risks and challenges. After the collapse of crypto exchange FTX in November 2022, he aligned with Genslerâs view that most crypto tokens should be treated as securities. He argued that issues in the digital asset market often surpass those in traditional finance. In January, he voted against the SECâs approval of spot bitcoin exchange-traded funds (ETFs). During a November 2022 keynote at Brooklyn Law School, LizĂĄrraga voiced doubts about cryptocurrencyâs ability to deliver financial inclusivity, stating it had yet to provide meaningful inclusivity or adequate investor protections.
Meanwhile, President-elect Donald Trump has embraced cryptocurrency, pledging to establish the U.S. as the âcrypto capital of the planetâ and proposing the creation of a national bitcoin reserve. He has also nominated a pro-crypto Treasury Secretary.