Five seats, two SEC commissioners, and, for some votes, a quorum of one.

[Image: generic commission hearing room, two of five chairs in use]

This week the Securities and Exchange Commission lost its longest-serving crypto advocate, gained a new quorum rule and proposed how investment advisers can hold crypto. Elsewhere, community banks sued a different regulator over crypto charters, and Brussels collected its homework on MiCA. I’ll start with the commission, because its arithmetic changed on Friday.

The setup: two SEC commissioners

Commissioner Hester Peirce’s last day at the SEC was Friday, 2 Oct, Bloomberg Law reported, leaving Chairman Paul Atkins and Commissioner Mark Uyeda as the only two SEC commissioners. On the same day, an amended SEC quorum rule took effect that lets a single commissioner constitute a quorum on a matter when every other sitting commissioner is disqualified from it.

The stakes

The SEC is designed to have five commissioners, no more than three from one party. It now has two, both Republicans, after Commissioner Caroline Crenshaw left in January. Under the commission’s existing rules, two members in office already counted as a quorum, so the agency can keep voting on rules and enforcement. What changes is the edge case: if one of the two recuses, the other can now act alone.

For crypto firms, the practical stakes are speed and durability. A two-member commission can move its crypto agenda without a dissent being written. Rules adopted that way are still subject to court challenge on their merits, like any other rule.

The read

Start with the quorum change, because it is the procedural story hiding inside the personnel one. The SEC’s final rule, dated 30 Sep, says the change is designed “to promote flexibility and finality of agency rulemaking”. It was adopted without public comment. The Administrative Procedure Act normally requires notice and comment before a rule takes effect, but it exempts rules about an agency’s own organisation and procedure, which is the category the SEC put this one in.

Peirce’s departure was not a surprise; her term expired in June 2025, and commissioners may stay up to about 18 months after that. She is joining Regent University School of Law as an associate professor, the university said. Atkins and Uyeda’s farewell statement credited her with pressing for crypto rules “long before regulatory clarity became a priority of this Commission”. She had led the agency’s Crypto Task Force since early 2025. The statement did not say who leads it next, and as far as I can tell, nobody has.

Her last policy act of note was a statement on Thursday’s proposal on crypto custody for advisers and funds, which she titled “Roller Coaster Ride”. The proposal would let state trust companies act as crypto custodians and let advisers hold client crypto themselves when no permitted custodian is available. Comments open for 60 days once it appears in the Federal Register. My colleagues have the detail in the SEC’s crypto custody proposal and a primer on what a crypto custodian is.

Not every regulator’s crypto openness is going unchallenged. On Friday the Independent Community Bankers of America sued the Office of the Comptroller of the Currency over national trust bank charters for crypto firms, arguing that Congress never meant the charter to be “a side door into the banking system”. That case is in ICBA’s lawsuit against the OCC.

What critics say: the ICBA’s complaint is the sharpest published version of the argument that federal agencies are loosening rules for crypto faster than the statutes allow. A two-member, single-party SEC cannot produce an internal dissent to test that argument. The counterpoint is procedural rather than political: the custody plan is still a proposal open to public comment, and any final rule can be challenged in court.

Across the Atlantic, the European Commission’s consultation on reviewing MiCA closed on Wednesday. Circle used its response to ask for the 30% bank-deposit floor on stablecoin reserves to be replaced with a liquidity test, a view the ECB shares; see Circle’s MiCA review response. The Commission has not said when it will publish proposals.

Paper trail

The calendar

  • Mon 5 Oct to Fri 9 Oct: Watch for the custody proposal’s Federal Register publication, which starts its 60-day comment clock. No date announced.
  • Wed 7 Oct, 18:00 UTC (20:00 CEST): The Federal Reserve publishes minutes of its September meeting. Not a crypto rule, but markets will read it.
  • Tue 20 Oct (deadline): Comments due on the SEC’s Regulation Crypto Assets proposal, file S7-2026-27.
  • ICBA v. OCC: No hearing scheduled yet.

Questions or tips on what to cover next week? Write to [email protected].

Produced by the Crypto Watch Desk newsroom using AI tools. This article is for information only and is not investment advice.