New SEC rule lets one commissioner alone constitute a quorum when all others are disqualified from a matter

A two-member SEC did not need the new rule to keep working. Under the vacancy exception in 17 CFR 200.41, the commissioners in office constitute a quorum whenever fewer than three are serving, and that already covered a Commission of one ^[5][3]. The amendment changed a different clause. The disqualification provision used to stop at two eligible commissioners. It now goes down to one, for the matter concerned, when every other sitting member is disqualified ^[6][4].

That condition is specific. A commissioner who disagrees with a proposal is not disqualified, and the rule keeps vacancy, nonattendance and recusal apart ^[7]. On the current roster, Uyeda could act as the quorum on a matter Atkins was disqualified from, and Atkins could do the same in reverse ^[4].

The crypto agenda can go a few ways. If both commissioners stay eligible on custody and on Regulation Crypto Assets, the new clause never applies, and both proposals go to a body of two if they are finalised at all ^[10][11]. Should one of them be disqualified on a particular crypto matter, the other alone constitutes the quorum for it ^[4]. A third commissioner would shrink the set of cases where one person can act alone.

In my view the concentration that counts for crypto policy is two people. CryptoSlate's account does not identify any crypto matter on which either commissioner is disqualified. The view is wrong if a crypto release or order appears with one commissioner acting as quorum because the other stepped aside.

The dates sit close together. Peirce's letter is dated Sept. 21 and the quorum amendment Sept. 30, nine days apart, and both her exit and the rule took effect Oct. 2 ^[1][3][16]. The custody proposal, release IA-7023, was approved by Atkins, Peirce and Uyeda on Oct. 1, the last day the Commission had three members ^[9][19]. Its comment period runs to Dec. 7, 66 days after Peirce left ^[10][17].

Peirce wrote in her letter that she was confident Atkins, Uyeda and the staff would continue to balance individual choice with sensible regulatory protections ^[14].

The SEC's stated reasoning is administrative. It says disqualifications arise and the agency has to keep conducting business. It describes the change as promoting flexibility and finality, and classes it as internal management and organization, not substantive regulation ^[8].

A smaller Commission does not turn the proposed custody framework into permission, as CryptoSlate notes ^[15]. Regulation Crypto Assets would create offering exemptions with disclosure requirements, and it too remains a proposal ^[11]. Tokenized-stock trading relief is the one item already in force, as an issued conditional order ^[12]. Atkins' October statement listed custody, the offering proposal, Commission interpretations and staff tokenization work together, and commissioners and staff play different parts across that list ^[13].