The U.S. Securities and Exchange Commission (SEC) is set for a significant transformation as Commissioner Jaime Lizárraga, a Democrat, announced his resignation, effective January 17. His departure follows the earlier decision by SEC Chair Gary Gensler to step down on January 20, coinciding with the inauguration of President-elect Donald Trump.

This reshuffle will leave the SEC with a Republican majority—two Republicans and a single Democrat—giving the new administration a head start in shaping the agency’s policies. Notably, Caroline Crenshaw, the remaining Democrat on the five-member commission, is serving an extended term that expires within 18 months.

Cryptocurrency and Policy Shift

Under Gensler’s leadership, the SEC aggressively pursued enforcement actions against cryptocurrency companies, alleging that platforms such as Coinbase and Binance operate as unregistered securities exchanges. His stance has fueled legal battles over whether tokens qualify as securities, setting the stage for a contentious transition.

With the anticipated appointment of Republican Mark Uyeda as acting chair, the agency is expected to pivot its regulatory and enforcement priorities, potentially easing its hardline approach on crypto.

Reasons for Departure

Lizárraga cited his wife’s serious illness as a key factor behind his resignation, stating:

“In reflecting on the challenges that lie ahead, we have decided that it is in the best interests of our family to close this chapter in my 34-year public service journey.”

Gensler’s Statement

Acknowledging Lizárraga’s contributions, Gensler remarked:

“He has been steadfastly focused on elevating the interest of everyday Americans… and has been an excellent partner in our work to protect investors and ensure markets work for all.”