Senate scraps vote to renominate SEC’s Crenshaw following crypto backlash

The Senate Banking Committee has scrapped a vote to advance the renomination of Democrat and crypto-skeptic Securities and Exchange Commissioner Caroline Crenshaw to another term at Wall Street’s top cop. 

The move comes after an intense lobbying effort by major players in the crypto industry to convince Senate Democrats to block President Biden’s renomination of Crenshaw to another five-year term.

The Senate Banking Committee – still controlled by the Democrats until the next Congress starts in January – was scheduled to vote Wednesday morning on advancing her nomination to the full Senate, but the markup was shelved due to limited floor time available before the Congressional session ends Thursday, according to a committee aide. 

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The cancellation will effectively end Crenshaw’s tenure at the commission unless President-elect Trump chooses to renominate her when he takes office on Jan. 20. However, it would be highly unlikely for the crypto-friendly president-elect to nominate someone seen as part of the Biden regulatory apparatus that unleashed a massive crackdown on the $3 trillion digital asset industry – an industry that helped him get elected. Ironically, Trump, who must name two people from outside his own party to fill the minority seats, put up Crenshaw during his first term as president.

Crenshaw could not be reached for comment. An SEC spokesman declined comment.

The effort to oust Crenshaw was yet another test of the crypto industry’s political clout. During the 2024 presidential campaign, Trump actively courted crypto voters – some 50 million strong – touting his ability to end the Biden-era regulatory stronghold. In return, he received millions from industry stalwarts like the Winklevoss brothers, while industry-backed super PACs spent over $130 million to pack Congress with pro-crypto candidates.

This time, through social media posts, letters to senators and even a mobile advertising campaign, the industry’s message to politicians was clear: A vote for Crenshaw would come with political repercussions. The threat was taken seriously and resulted in last week’s vote being rescheduled for Wednesday morning after Senate Republicans blocked Banking Committee Chairman Sherrod Brown’s efforts to hold a special off-the-floor committee vote on Crenshaw and Biden’s Financial Stability Oversight Council nominee Gordon Ito outside of normal Senate hours.

Some Democrats are taking umbrage at big crypto’s political clout. Amid the attempts by crypto-friendly Republican senators, like committee ranking member Tim Scott, to block the vote, Brown said, “This is why people hate Washington. Corporate special interests have run a disgusting smear campaign against Caroline Crenshaw, an Army reservist and public servant who has been nominated and confirmed by a Republican President and Republican Senate.”

Brown, an Ohio Democrat who was himself a target of the crypto lobby’s political spending due to his perceived anti-crypto stance, lost the seat he had held since 2007 to Republican challenger Bernie Moreno, who the industry backed to the tune of $40 million. 

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Crenshaw will likely serve out her term until the new Republican-controlled Senate confirms her replacement next year. It’s unclear which candidates Trump will choose to fill the non-Republican seats on the commission, but congressional tradition allows the minority party to recommend nominees, although the president is not obligated to take their suggestions.

Meanwhile, the crypto industry is wasting no time in floating names to the Trump transition team of pro-crypto Democrats they would like to see take up the roles. One name being discussed, according to an industry source at one of the crypto advocacy groups who wished to remain anonymous, is Georgetown law professor Chris Brummer. A Democrat, Brummer’s name was floated as a possible SEC chair if Vice President Kamala Harris had won the White House.

Brummer is an avid supporter of digital assets and blockchain and runs the annual D.C. Fintech Week attended by many industry participants. Another is Jai Messai, the chief legal officer of blockchain payments company Lightspark and a former partner at white-shoe law firm Davis Polk & Wardwell. TuongVy Le, general counsel for crypto bank Anchorage Digital, is also an industry favorite. Prior to her work in crypto law, Le served at the SEC for six years as senior counsel in the Division of Enforcement and, later, as chief counsel in the Office of Legislative and Intergovernmental Affairs. SEC alum and special advisor to the Research and Innovation Division of the New York Department of Financial Services, Carla Carriveau, is also a front-runner.