SEC’s Anti-Crypto Stance Wavers as Another Key Resignation Hits

U.S. Securities and Exchange Commission (SEC) Commissioner Jaime Lizárraga has announced his intention to step down from the agency on Jan. 17, 2025.

The U.S. Securities and Exchange Commission (SEC) is facing another key resignation as Commissioner Jaime Lizárraga announced his intention to step down on Jan. 17, 2025.

Lizárraga's departure follows that of SEC Chair Gary Gensler, who announced his resignation earlier this month, paving the way for a potential shift in the agency's stance towards the cryptocurrency industry.

Gensler's tenure was marked by a stringent regulatory approach towards crypto, initiating enforcement actions against major exchanges.

In a statement on Friday, Lizárraga said his decision to leave the agency was driven by family priorities, particularly his wife Kelly's health challenges.

“Until my departure in January, I will remain fully engaged in the Commission's ongoing work and activities,” he said. “I don't yet know what comes next, but I do know that it has been a great honor to serve as SEC Commissioner.”

After 34 years in public service, he said it was time to focus on his family's future and expressed hope for Kelly's full recovery. He thanked President Joe Biden for nominating him to the role.

Lizárraga went on to praise Gensler for his “exceptional leadership” and thanked his fellow commissioners for their “collaborative spirit.”

“The Commission plays a critical role in maintaining the integrity of our capital markets and significant achievements were realized under Chair Gensler's agenda,” he added.

Gensler's resignation will coincide with President-elect Donald Trump's inauguration on Jan. 20, 2025. During his campaign, Trump pledged to remove Gensler and foster a more crypto-friendly regulatory environment.

The SEC has five commissioners, including the Chair. Two Commissioners, Hester M. Peirce and Mark T. Uyeda, are Republicans, while Caroline A. Crenshaw and Lizárraga are Democrats.

Lizárraga has been an advocate for stronger regulation of the cryptocurrency market, which he said remained largely unregulated and posed unique risks and challenges.

Following the collapse of crypto exchange FTX in November 2022, he agreed with Gensler that most crypto tokens should be treated as securities and argued that the problems in the digital asset market were “even greater” than those in traditional finance.

In January, he voted against the SEC's approval of spot bitcoin exchange-traded funds (ETFs). During a November 2022 keynote at Brooklyn Law School, Lizárraga also expressed doubts about cryptocurrency's ability to deliver on financial inclusivity, stating it had yet to provide meaningful inclusivity or adequate investor protections.

On the other hand, Trump has embraced cryptocurrency, pledging to establish the U.S. as the “crypto capital of the planet” and proposing the creation of a national bitcoin reserve. He has also nominated a pro-crypto Treasury Secretary.