Another Democrat Quits SEC After Gary Gensler—Here’s What It Means

A day after Securities and Exchange Commission (SEC) chair Gary Gensler announced that he plans to resign once Donald Trump is sworn in as president, another Democrat on the five-member Commission announced Friday that he is also stepping down. 

Jaime Lizárraga, who has served as an SEC commissioner since 2022, said today that he will step down from his role on January 17, 2025, and has already informed President Joe Biden of those plans. Gensler is set to depart three days later on January 20.

Lizárraga, whose term would have otherwise lasted until 2027, said the decision to step down was primarily motivated by his wife’s serious illness.

While the development means that the SEC will lose another supporter of Gensler’s aggressive crypto agenda, it is also somewhat limited in its impact. The SEC, by design, does not allow for more than three of its five commissioners to come from the same political party. 

Thus, though only one Democrat on the Commission, Caroline Crenshaw, currently appears likely to remain in her role once Trump retakes the White House, the president-elect will have to appoint another Democrat to fill out the agency’s vacant non-Republican spot. 

Trump has done this before. In 2019, during his first term, he appointed Allison Lee, a Democrat, to fill a Democratic vacancy on the Commission.

Regardless, the SEC requires only a majority vote of three commissioners to move forward on key issues, and the Republican president-elect will certainly have three members of his own party on the Commission come next year.

The largest outstanding question regarding Trump’s SEC will be who he appoints as the financial regulator’s chair—a crucial role that will shape the agency’s approach to hot-button issues including crypto. 

Trump has pledged to create a pro-crypto regulatory environment, and some in the industry have expressed hope that one of their own might run the SEC to ensure such an outcome. 

On Friday, however, one of the top crypto-friendly contenders for SEC chair, Robinhood Chief Legal Officer Dan Gallagher, announced he was withdrawing his name from consideration for the post. 

Other leading candidates for the position currently include Brian Brooks, the former CEO of Binance.US and acting comptroller of the currency, and the two current Republicans already on the SEC, Hester Peirce and Mark Uyeda.

Edited by Andrew Hayward