SEC Commissioner Caroline steps down! Her anti-crypto stance once sparked controversy; what regulatory impacts remain

SEC’s last Democratic commissioner, Caroline Crenshaw, steps down, leading to a complete shift of decision-making power to the Republican side. Cryptocurrency regulation is expected to shift from vigorous enforcement to institutionalization and modernization of rules.

The rare departure of a Democratic commissioner marks the beginning of a fully Republican-led era at the SEC

The U.S. Securities and Exchange Commission (SEC) officially bid farewell to its core member Caroline Crenshaw, who served for over ten years, on January 2, 2026.

With the end of her term and her departure, the SEC’s five-member decision-making committee now only has three Republican members: Chair Paul Atkins, Commissioner Hester Peirce, and Commissioner Mark Uyeda.

This change signifies that the SEC has officially entered a new era dominated by Republicans, and it is also the first time in many years that the decision-making leadership has shown a high degree of political unity.

In an official statement, Chair Atkins expressed respect for Crenshaw’s contributions over the past decade, praising her steadfast dedication to protecting investors.

Crenshaw’s departure was not without controversy. At the end of 2025, the Senate Banking Committee, under strong lobbying pressure from the crypto industry and some Republican lawmakers, ultimately canceled the procedural vote on her reappointment nomination, effectively ending her path to renewal.

Industry leaders including Coinbase CEO Brian Armstrong and Gemini co-founder Tyler Winklevoss publicly opposed her reappointment, believing her regulatory mindset was outdated and hindered innovation. With her departure, the market generally expects the SEC to adopt a more “crypto-friendly” stance in 2026, accelerating the implementation of compliance frameworks for digital assets.

The industry’s number one opponent, who was the sole dissenting vote on Bitcoin ETF approval

Within the crypto community, Crenshaw is known for her extremely cautious, even “oppositional,” stance. During her tenure, she almost always voted against proposals for relaxed crypto regulation.

The most notable case was in January 2024, when the SEC approved a spot Bitcoin ETF. She was one of only two commissioners to oppose the decision and issued a lengthy dissenting statement, criticizing the move as “unsound and historically inconsistent,” warning that it would sacrifice investor protection. Later, in internal votes on multiple crypto exchange-traded products (ETPs) in 2025, she consistently maintained her “oppose” position.

Further reading
Crypto Milestone! Bitcoin Spot ETF Approved—What Happens Next?
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Crenshaw’s skepticism towards cryptocurrencies extended beyond ETFs. She repeatedly expressed concerns in public forums about the security and extreme volatility of digital assets, believing that insufficient regulation could lead to widespread scams.

In May 2025, when the SEC decided to settle with Ripple Labs, she issued a strongly worded opposition letter, arguing that this settlement and the “systematic dismantling” of crypto enforcement procedures were a huge harm to investors and undermined the courts’ role in interpreting securities law. Even in her final months before leaving, she questioned “tokenized equity” products, warning that such products are not perfect replicas of underlying assets and may contain unknown risks.

Enforcement shift and rule modernization, Chair Atkins previews 2026 reform blueprint

With Crenshaw’s departure and the solidification of a Republican lineup, Chair Atkins’s “Digital Asset Reform Plan” is expected to accelerate in 2026. Atkins has previously stated that one of the SEC’s top priorities is to establish clear crypto regulation rules, rather than relying solely on “enforcement actions” to manage the market.

At a policy summit at the end of 2025, he even predicted that 2026 would be a “year of seedling reforms,” hinting at a series of modernization rules for tokenized securities, liquidity staking, and crypto custody services to be announced successively.

Currently, the SEC’s focus has shifted from high-pressure investigations of the past few years to establishing a “regulatory exemption” mechanism. This mechanism aims to allow technologically advanced fintech companies, under certain conditions, to temporarily bypass some traditional securities regulations incompatible with blockchain technology, enabling them to directly test new business models in the market.

Further reading
SEC Roundtable》Atkins Rejects Building Financial Prisons, Crypto Advocates Support Zero-Knowledge Proofs

This shift reflects the new generation of decision-makers’ ambition to embed digital assets into mainstream financial infrastructure. Investment bank TD Cowen’s analysis indicates that a fully Republican committee will enable Atkins to push rules faster, but it also carries the long-term risk of policy reversal when the party in power changes.

Both major regulatory agencies face “leadership shortages,” making legislative progress on market structure a key issue

Crenshaw’s departure also highlights the widespread “staffing shortage” faced by Washington financial regulators. Similar to the SEC, the Commodity Futures Trading Commission (CFTC) is also experiencing personnel vacancies. Although Trump-era nominee Mike Selig has been confirmed as CFTC Chair, other commissioner seats remain unfilled, leaving Selig in a decision-making position as the “sole decision-maker” on the five-member commission.

Further reading
Trump Administration’s Final Puzzle in Crypto Regulation Completed! Senate Confirms CFTC and FDIC Dual Chair Appointments
Bitcoin Futures Key Player Returns! CFTC Appoints Amir as Chief of Staff, Will Become Policy Hub

This hollowing out of regulatory leadership, while reducing internal debate and opposition in the short term, raises concerns about the legitimacy of policies and the lack of bipartisan consensus. Recently, House Representative Maxine Waters called for hearings on the SEC’s large-scale withdrawal of crypto cases and policy shifts.

Looking ahead to 2026, the focus of the U.S. crypto industry will be on the implementation of market structure legislation such as the 《GENIUS Act》 and 《CLARITY Act》. With Crenshaw, the most vocal opponent, leaving the stage, the division of authority between the SEC and CFTC is expected to become more coordinated.

Although President Trump has expressed an “open attitude” towards nominating new Democratic commissioners to maintain bipartisan balance, until new appointees are in place, Atkins and his team will hold absolute dominance.

This means 2026 will be a critical year for the transition of U.S. crypto regulation from “chaotic enforcement” to “systematic compliance.” How Crenshaw’s legacy of “investor protection first” will balance with “encouraging innovation” under the new Republican framework remains a key focus for market observers.