Caroline Crenshaw, the remaining Democratic commissioner on the US Securities and Exchange Commission (SEC), is anticipated to leave at the end of the year. She appears intent on making a stand before her departure.
In a speech at the “SEC Speaks” conference, Crenshaw’s remarks contrasted sharply with those of Republican commissioners Hester Peirce, Mark Uyeda, and newly confirmed Chair Paul Atkins. Uyeda claimed the SEC had deviated significantly from its traditional path. Peirce welcomed a new paradigm for cryptocurrency, while Atkins pledged that the SEC would support rather than inhibit innovation. Crenshaw expressed significant concern over this approach.
Crenshaw argued that the US regulatory framework is being dismantled precariously, likening it to a Jenga tower. She warned that the SEC is overlooking substantial risks, particularly in areas like cryptocurrency, and indicated this could lead to a regulatory collapse reminiscent of past financial crises.
The commissioner criticized the SEC’s recent decision to settle with Ripple, interpreting it as indicative of a reluctance to enforce longstanding laws. She argued that the agency’s actions represent an abandonment of its duty to uphold existing securities laws, capitulating to industry pressure for new rules.
Another point of concern for Crenshaw is the SEC’s readiness to modify or rescind existing rules without adequate consideration of implications. This behavior undermines the SEC’s authority and diminishes confidence in its regulations.
Crenshaw also highlighted the significant staff exodus at the SEC, estimating a 15% departure rate due to retirements, resignations, or fear of dismissals. This loss of experienced personnel is occurring as market complexity and volatility increase, which could exacerbate existing regulatory challenges.
Crenshaw emphasized the risks posed by unregulated private assets being sold to regular investors at high fees, warning of potential financial instability affecting Main Street America more than corporate interests.
The expectation is that new appointments will fill the vacancies left by Crenshaw and former commissioner Jaime Lizarraga. However, skepticism remains about the potential alignment of future commissioners with Crenshaw’s regulatory approach.
Further information can be found in articles discussing Crenshaw’s position within the SEC.
