SEC The absence of leadership may actually accelerate the formulation of encryption regulations.

After U.S. legislators failed to pass a comprehensive digital asset market structure bill, financial regulatory agencies have stepped up efforts to revise regulations and enforcement rules targeting crypto companies and related issuance activities.

However, the two major regulatory agencies – the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) – are both facing staffing shortages at the leadership level. As a result, some regulatory decisions regarding this $3 trillion crypto market fall primarily into the hands of just three individuals, two of whom were nominated by U.S. President Donald Trump.

In terms of SEC, earlier this month, after member Hester Pierce (Hester Peirce) stepped down, there are currently only two members left: Chairman Paul Atkins (Paul Atkins) and former acting chairman Mark Uyeda (Mark Uyeda). The leadership vacancy at CFTC is even more pronounced; since December 2025, Michael Selig (Michael Selig) has been the sole chairman and member confirmed by the Senate. According to the design, both organizations were supposed to have five members each.

Both of these institutions have proposed rules, which seem to be an attempt to replace congressional legislation with regulatory rules in order to regulate the cryptocurrency sector.

SEC proposed rules in August, aiming to provide a "safe harbor" for companies so that tokens are not considered "investment contracts"; CFTC followed up in October. Selig stated that the agency will use its "existing legal authority" to address crypto regulation issues through the proposed rules for exchanges. Atkins also added on October 2nd that "more regulatory proposals for the crypto sector are coming soon."

Could a member with the identifier SEC have the ultimate decision-making power over encryption rules?

On September 30th, SEC further facilitated these regulatory pathways despite having a insufficient number of members. The institution issued a final rule that came into effect on October 2nd. SEC stated that this rule modifies the statutory membership requirements with the aim of "enhancing the flexibility and definitiveness of institutional rule-making." In many cases, if only two members are in office, this rule reduces the required statutory number of members to just one.

Robin Wrigglesworth, a columnist for The Financial Times in the UK ( Robin Wigglesworth ), wrote in a commentary on October 5th: “... Now there are only two members left, and one of them may very well need to recuse themselves from a certain topic (or be absent for other reasons). So now, just one person would be sufficient to pass a formal rule that would apply to the vast trillions of dollars in the US securities market.”

After key committee members resign, the crypto regulation of SEC and CFTC will depend on three remaining committee members.

Uyeda responded on Sunday in a commentary he published in The Financial Times, stating that although the SEC currently has only two members, and Trump has not yet announced additional nominees to fill the vacant seats, the SEC's "commitment to its mission has not changed." This policy maker noted that this change in rule "clarifies that if all members except one lose their qualifications for some reason, the committee can still constitute a quorum."

Uyeda stated: "The claim that SEC is 'hurriedly modifying' its quorum rules so that the remaining members can 'do as they please' may easily evoke images of a fictional dystopian regime, but it misleads readers and fails to explain why the committee decided to revise the quorum rules, or why this is a better arrangement."

As of Tuesday, the White House has not announced any candidates for SEC and CFTC. This means that the rule-making processes for these two institutions may be in the hands of just one person each for the coming months, or even longer.

Congress still has time to vote on the core market structure bill at the center of this dispute—the Digital Assets Market Clarification Act ( Digital Asset Market Clarity Act, abbreviated as CLARITY Act ). However, some experts do not believe that legislators will make progress on this bill during the "lame duck" session after the mid-term elections in 2026, before the next Congress takes office in January.