Crypto Industry Opposes Re-Confirmation of SEC Commissioner Caroline Crenshaw

When President Trump nominated Caroline Crenshaw as a Commissioner of the U.S. Securities and Exchange Commission in 2020, she was confirmed unanimously by the Senate.  President Biden renominated Commissioner Crenshaw earlier this year but the Senate did not vote on the confirmation prior to the November 5 election.  A vote by the Senate Banking Committee was supposed to take place during a meeting this past Wednesday, December 11, 2024, but the meeting was postponed at the last minute.  No date for the re-confirmation vote has yet been set. 

The Banking Committee is currently led by Senator Sherrod Brown, Democrat from Ohio.  He was targeted by about $40 million in crypto-industry campaign spending and lost his seat to a blockchain businessman, Bernie Moreno.  The current ranking Member on the Banking Committee is Senator Tim Scott, Republican from South Carolina.  He ask asked  President Biden to withdraw his outstanding nominations after the election, saying that the “11th hour push by Democrats to ram through President Biden’s nominees is a blatant attempt to hinder President Trump’s agenda.”

Crypto executives and advocacy groups have strongly opposed Ms. Crenshaw’s re-confirmation.  For example, Coinbase CEO Brian Armstrong posted the following on X: “Caroline Crenshaw was a failure as an SEC Commissioner and she should be voted out.  She tried to block the Bitcoin ETFs and was worse than Gensler on some issues (which I didn’t think was possible).”

To like effect, Ripple Chief Legal Officer Stuart Alderoty wrote on X: “Commissioner Crenshaw is, in some ways, even more rogue than Gensler. At least Gensler backed down after a Court said blocking [Bitcoin] spot ETFs was ‘arbitrary and capricious.’ Crenshaw, however, continued to vote “no,” insisting that the Court got it wrong in her dissent. Unelected bureaucrats are not above the law.”

The Digital Chamber (TDC) is an industry group that educates and advocates for the digital assets and blockchain industries.   In a December 11, 2024 letter, TDC president Cody Carbone wrote to Senators Brown and Scott and urged the Banking Committee to oppose the re-confirmation of Ms. Crenshaw.  He wrote the following as an example of her shortcomings:

In her dissent on spot Bitcoin ETPs, Commissioner Crenshaw mischaracterized the integrity of the Bitcoin market, relying on outdated data and flawed arguments that failed to account for significant advancements in market structure and oversight. . . The SEC needs leaders unencumbered by an entrenched bias against digital assets and the industry.

The Blockchain Association is an advocacy group dedicated to promoting a pro-innovation policy environment for the digital asset economy.  It is currently in court against the SEC, opposing the recently finalized Dealer Rule (see our post here).  It wrote to Senators Brown and Scott on December 9, 2024 and also opposed the re-confirmation of Ms. Crenshaw.  It said:

Congress has a clear mandate from the American people to establish sound and reasonable cryptocurrency-related policies. Unfortunately, Commissioner Crenshaw’s tenure at the SEC has been marked by actions that seem to be at odds with this charge. For example, her continued opposition to the approval of a spot Bitcoin ETP, after the DC Circuit Court’s ruling that the SEC acted “arbitrarily and capriciously” in rejecting it, does not evidence respect for the judicial process. Nor does it embody the SEC’s merit-neutral mission or the needs of American investors—including the one-fifth of Americans who own crypto. The Senate should reject the failed policies of the past instead of advancing a nomination that will potentially stifle the growth and integration of blockchain-based innovations in our economy.

The industry has also opposed Commissioner Crenshaw for her characterization of the crypto markets as “petri dishes of fraudulent conduct.” 

The current SEC Commissioners include two Republicans, Hester Peirce and Mark Uyeda, and three Democrats, Ms. Crenshaw, Chairman Gary Gensler, and Jaime Lizarraga.  Chairman Gensler announced that he would resign from the SEC on inauguration day, January 20, 2025.  Commissioner Lizarraga said he plans to depart on January 17.

President-elect Trump announced that he planned to nominate Paul Atkins to chair the SEC.  Atkins is generally viewed as a pro-crypto advocate and is a member of the Board of Advisors of The Digital Chamber.