Crenshaw’s Exit, Dissent, and the SEC’s Troubled Crypto Record

As a crypto lawyer, I value disagreement. Markets function better when regulators are forced to confront opposing views, and agencies are healthier when internal dissent exposes weak assumptions and untested theories. In that respect, Commissioner Caroline Crenshaw’s presence at the SEC mattered. She served as the Commission’s lone Democratic voice through the end of her holdover period and formally departed the agency on January 2, 2026 (SEC). Her exit leaves the SEC operating with three sitting commissioners, Chair Paul Atkins and Commissioners Hester Peirce and Mark Uyeda (SEC), each of whom has publicly expressed a more deregulatory (anti-regulation by enforcement) and crypto-accommodative orientation than the Commission’s prior majority.

But acknowledging the value of dissent does not require suspending scrutiny. It is fair, and necessary, to ask whether the SEC during the prior administration, and Crenshaw in particular, demonstrated sufficient command of the crypto markets they sought to regulate, and whether the agency’s approach over the past several years meaningfully advanced investor protection or instead imposed avoidable costs through uncertainty and inconsistency.

Crenshaw emerged as the Commission’s most persistent crypto skeptic during a period of profound regulatory friction. She consistently argued that many digital assets fit within existing securities law frameworks and resisted calls for a bespoke regulatory regime. Her signature moment, at least for crypto lawyers, was her dissent from the SEC’s January 10, 2024 approval of spot bitcoin exchange-traded products, which she criticized as “unsound and ahistorical,” emphasizing risks she believed remained unresolved in the underlying spot markets. That dissent reflected a core premise that regulatory acceptance should follow, not precede, credible answers on manipulation, custody, valuation, and market integrity.

Yet the broader record also reflects an agency that, for years, struggled to articulate a clear and durable regulatory theory for crypto that market participants could apply with confidence across products and business models. Enforcement actions often carried the practical weight of de facto rulemaking. Whatever one thinks of that strategy, it predictably produced uneven guidance, shifting emphasis, and a compliance environment where similarly situated actors could experience very different outcomes depending on timing, posture, and forum.

Crenshaw’s skepticism often rested on legitimate investor-protection concerns, but skepticism alone is not expertise. Crypto markets raise novel questions about decentralization, governance, custody, market structure, and the boundaries between intermediated and non-intermediated systems. Those questions demand technical fluency and conceptual precision. When regulators lean on inherited labels without consistently mapping them to how these systems actually function, the result is not merely aggressive oversight. It is legal uncertainty that can distort incentives and push activity into less visible corners.

Crenshaw herself broadened her critique in late 2025 beyond crypto. In a Brookings speech on December 11, 2025 and in a contemporaneous interview, she warned that the SEC’s direction risked weakening disclosure, deterrence, and market transparency, and she framed the deregulatory drift as historically familiar and potentially dangerous. (See Politico). In those remarks, she also connected policy change to institutional capacity, pointing to staffing losses and diminished tools for detecting fraud and monitoring risk (See Financial Times). Importantly, those were not presented as abstract concerns. They were part of her thesis that the agency was reducing friction for industry while simultaneously reducing its own ability to see problems early and respond effectively.

Where I part ways, at least in emphasis, is this: the crypto industry’s experience in recent years underscores a parallel truth that investor protection is not advanced when rules are unknowable, standards shift midstream, and enforcement theories lack coherence. Markets do not require regulators to be permissive. They require them to be competent, predictable, and grounded in the realities of how products function. When the SEC regulates by assertion rather than by clear rulemaking, it may win individual skirmishes while losing the broader project of building credible, administrable standards.

Crenshaw’s departure also places the SEC in a posture that is both lawful and historically unusual. By statute, the Commission is designed to be bipartisan, with no more than three commissioners permitted to belong to the same political party. The law does not require that both parties be represented at all times, nor does it prohibit vacancies. As a result, a Commission composed of three members from one party, with the remaining seats unfilled, is permissible as a matter of law.

That said, such configurations are uncommon. The SEC’s staggered terms and holdover provisions are intended to promote continuity and ideological balance across administrations, not to eliminate dissent altogether. Even on an interim basis, the absence of a dissenting commissioner removes an internal check that has historically shaped rulemaking, enforcement priorities, and market signaling.

In closing, I think the lesson of the past several years is not that dissent was misplaced. It is that dissent without clarity, and skepticism unaccompanied by deep market understanding, can harden into regulatory paralysis. And frankly, regulatory theories that don’t make sense.

If the SEC is serious about restoring credibility in digital asset regulation, any newly appointed Democratic Commissioners must move beyond ideological posture and toward a framework that distinguishes between technologies, activities, and risks with precision. Otherwise, the industry and investors alike will continue to bear the costs of uncertainty, regardless of who occupies the dissenting seat.

That’s all for now,

Braeden

*** Not legal advice ***

About the author: K. Braeden Anderson is a Partner at Gesmer Updegrove LLP, where he leads the firm’s Securities Enforcement & Investigations practice, and chairs Mackrell International’s Blockchain & Digital Assets Group and Securities Enforcement & Investigations Group. He is a nationally recognized securities regulatory and enforcement attorney whose practice sits at the intersection of traditional financial regulation and emerging technology. He has been recognized in Best Lawyers: Ones to Watch® in America (2025) for Financial Services Regulation Law and Securities Regulation, and was named the #1 most-read fintech thought leader in the United States in Mondaq’s Spring 2025 Thought Leadership Awards.

Before joining Gesmer Updegrove, Braeden founded a Washington, D.C.–based law firm. He previously served as Assistant General Counsel at Robinhood Markets, Inc. (NASDAQ: HOOD), advising on high-stakes regulatory and enforcement matters, and earlier practiced at Kirkland & Ellis LLP and Sidley Austin LLP in New York and Washington, D.C.

Braeden is a prominent voice in securities and crypto regulation and a leading example of how lawyers can build brand through education and content. He publishes a weekly newsletter reaching more than 20,000 legal and financial professionals, runs a YouTube channel with over 160,000 subscribers, and regularly produces written and multimedia thought leadership through his blog, Anderson Insights. His work focuses on enforcement trends, fintech regulation, and the evolving role of digital assets in capital markets.