Another SEC Democrat to Drop Out, Leaving Republicans Running Agency by February

As an analyst with over two decades of experience in financial markets, I find myself reflecting on the recent developments at the Securities and Exchange Commission (SEC). The sudden resignation of Jaime Lizárraga, followed by Gary Gensler’s announcement to step down, presents a significant shift in the agency’s dynamics.

A second Democratic member of the Securities and Exchange Commission is set to depart in January, which means that the commission will have a Republican majority. This could signal a potential change in direction for the agency as it navigates its role under the incoming administration of President-elect Donald Trump.

Commissioner Jaime Lizarraga is departing on January 17th, according to a statement released on Friday. This early departure could provide Republicans with an advantage in shaping the commission’s policies for potential months ahead, particularly those concerning cryptocurrency. As of 2025, Caroline Crenshaw will be the lone Democrat on the five-member commission, and her term has already expired. She is currently in a renewable extension that could last up to 18 months.

Lizárraga said he’s leaving because his wife has been suffering with a serious illness.

In considering the difficulties that are approaching, we believe it’s most beneficial for our family to bring an end to this 34-year chapter in my career in public service, as expressed in his statement.

The commission, headed by Gensler, has been actively pursuing enforcement against cryptocurrency companies in recent years. Gensler announced this week that he will step down once Trump is inaugurated on January 20th. Under his leadership, the commission has argued that digital asset platforms like Coinbase Inc. (COIN) and Binance are functioning as unregistered securities exchanges, and that numerous tokens traded on these platforms are considered securities.

The previous commission took a firm position that led to numerous enforcement actions being initiated. These actions have evolved into lawsuits in federal courts, where the industry has challenged the agency’s view that tokens should be classified as securities. This is the state of affairs that the incoming commission will inherit.

If Donald Trump selects one of the current Republican commissioners, most likely Mark Uyeda, to serve as acting chair, this newly appointed leader could start adjusting policy objectives and the agency’s viewpoint on cryptocurrency. With Commissioner Hester Peirce being part of a two-member majority alongside him, these two Republicans will control the agency’s course while the remaining commission positions are filled by Trump’s nominees.

On Friday, Gensler stated that Lizárraga has consistently prioritized enhancing the concerns of average U.S. citizens.

In his statement, Gensler noted that at the Securities and Exchange Commission, they have made an effective team as we strive to safeguard investors, encourage investment opportunities, and establish fair markets for both investors and companies.