U.S. Crypto Regulation Concentrated in Hands of Three Commissioners Amid Legislative Stalemate and SEC Quorum Shift

Following the failure of United States lawmakers to pass a comprehensive digital asset market structure bill, financial regulators have stepped up efforts to independently change the rules governing the oversight and enforcement of crypto companies and offerings. However, the two primary financial regulators—the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)—are severely understaffed at the leadership level. This leadership vacuum has left monumental decisions regarding the regulation of aspects of the $3 trillion cryptocurrency market largely in the hands of just three individuals, two of whom were originally nominated by U.S. President Donald Trump.

At the SEC, the commissioner roster has dwindled significantly. Only two commissioners—Chair Paul Atkins and former Acting Chair Mark Uyeda—remain following the departure of Commissioner Hester Peirce earlier this month. The shortage of leadership at the CFTC is even more stark, with Michael Selig serving as the sole Senate-confirmed chair and commissioner since December 2025. Both federal regulatory agencies are structurally intended to be managed by a panel of five commissioners each, meaning they are currently operating at a fraction of their intended leadership capacity.

In the absence of clear statutory direction from Capitol Hill, both agencies have advanced independent regulatory proposals that appear to take the place of congressional legislation in governing cryptocurrencies. The SEC proposed rules in August to provide companies with a safe harbor, protecting certain digital tokens from being classified and regulated as “investment contracts.” The CFTC followed suit in October, with Selig stating that the agency would utilize its “existing statutory authorities” to address crypto regulation through targeted proposed rules directed at digital asset exchanges. Furthermore, SEC Chair Paul Atkins added on Oct. 2 that “more regulatory proposals [were] on the horizon” for the digital asset sector.

Could One SEC Commissioner Have the Final Say on Crypto Rules?

On Sept. 30, the SEC made these alternative regulatory avenues even easier to pursue given its depleted roster of commissioners. The agency released a final rule—which went into effect on Oct. 2—stating that it amended quorum requirements with the objective of “promot[ing] flexibility and finality of agency rulemaking.” Notably, the new rule reduces the number of commissioners legally required for a quorum down to just a single person in many cases, provided that only two commissioners are physically present.

“[…] with now just two commissioners around and it being entirely possible that one of them might have to recuse themselves from an issue (or be otherwise MIA), just one is now enough to pass a formal rule that applies to America’s vast multitrillion-dollar securities markets,” wrote Robin Wigglesworth in an Oct. 5 op-ed for the Financial Times.

This drastic operational shift has ignited intense debate among legal scholars, financial journalists, and policymakers over the concentration of executive and regulatory power. Critics have pointed out that empowering a single individual to pass binding rules for a massive financial market stretches standard administrative governance models to their absolute limits, particularly when those rules are stepping into areas traditionally reserved for legislative debate and congressional enactment.

Mark Uyeda responded to these widespread criticisms in his own Financial Times op-ed on Sunday, strongly defending the agency’s actions. Uyeda claimed that the SEC’s “commitment to its mission remains unchanged” despite having only two commissioners on the bench and no formal announcements from the White House regarding additional nominations to fill the lingering empty seats. The policymaker argued that the rule change merely “clarifies that the Commission can establish a quorum if all but one commissioner is disqualified from a matter.”

“Suggesting that the SEC is ‘hastily revamp[ing]’ its quorum rule so that the remaining commissioners can ‘have their way’ makes for a colourful comparison to fictional dystopian regimes but misleads readers about why the Commission revised its quorum rule and why it’s for the better,” said Uyeda.

As of Tuesday, the White House had still not announced any new nominations for vacant seats at either the SEC or the CFTC. This administrative delay threatens to leave the crucial rulemaking process entirely in the hands of just one person at each agency for months, if not longer. Meanwhile, Congress retains a window of opportunity to vote on the digital asset market structure bill at the absolute center of the controversy—the Digital Asset Market Clarity (CLARITY) Act. However, numerous policy experts and Capitol Hill observers do not see lawmakers advancing the landmark legislation during the lame-duck session unfolding between the 2026 midterm elections and the formal swearing-in of the next congressional session in January.