U.S. Securities and Exchange Commission Commissioner Jaime Lizárraga plans to leave the commission, effective January 17, 2024. He will depart just one week before SEC Chair Gary Gensler departs on January 20, two members of a five-member commission. The other three sitting members are Caroline Crenshaw, Hester Peirce, and Mark Uyeda.
Leadership Shifts with Changing Politics
Lizárraga is leaving at a time of significant political change, as Donald Trump gets ready to assume office. His administration is very likely to make major changes at the SEC, possibly even installing a “crypto czar”. This sets in motion Trump’s campaign promise to pursue a friendly-to-crypto regulation and to end what he called the “war on crypto”.
The resignations of two Democratic commissioners—Lizárraga and Gensler—have exposed deepening fissures within the commission. Remaining members include Crenshaw, Peirce, and Uyeda-all reflecting differing views, as Peirce and Uyeda often dissented in commission decisions under Gensler’s leadership.
Lizárraga’s Tenure and Impact
Lizárraga, appointed in 2022, was due to stay until 2027. He has been the subject of much criticism, on everything from his penchant for what some saw as overreaching regulatory projects. Small businesses frequently complained about the burdens his corporate reporting requirements placed on them, while others attacked him as being more interested in political agendas than investor protection.
Lizárraga cited family reasons in announcing his resignation:
It is in the best interests of our family to close this chapter in my 34-year public service journey.”
Despite the controversies, Lizárraga’s contributions to advancing corporate transparency and governance reforms are notable facets of his legacy.
Implications for the Crypto Industry
The leadership changes looming over the SEC come at a critical juncture for the crypto industry. During Gensler’s helm, the SEC was highly criticized for its strict approach to digital assets, perceived by many as choking innovation. Lizárraga’s exit further whips up optimism among crypto advocates, who had been expecting more friendly regulations from Trump’s administration.
With the change in leadership at the top, questions over the direction of U.S. financial regulation remain, particularly about emerging markets like cryptocurrency. With the promise of a “crypto czar” on the horizon, the industry is bracing for reforms that could reshape its trajectory.
