A Quorum of One: The SEC Adopted the Rule on Sept. 30, Peirce Leaves on Oct. 2, and Two Commissioners Now Decide Every Crypto Rule

The SEC adopted its new quorum rule on September 30, 2026, just before Hester Peirce’s October 2 departure. The amendment explicitly permits one eligible commissioner to constitute the Commission’s quorum when disqualifications leave only that person. It takes effect upon Federal Register publication; adoption alone does not establish that publication has occurred. SEC final rule.

After Peirce leaves, Paul Atkins and Mark Uyeda will occupy the SEC’s two remaining filled seats. Their agreement can keep crypto rulemaking moving, while disagreement can block action. The immediate test is the pending Regulation Crypto Assets proposal, whose comment period ends October 20. Commission staffing; SEC proposal.

What the quorum amendment changes

Release No. 34-106537, titled “Commission Quorum Requirement,” amends 17 CFR 200.41. Three members remain the standard quorum. When fewer than three commissioners hold office, the number actually serving constitutes a quorum. For a particular matter, if disqualifications under 17 CFR 200.60 or otherwise leave two or one eligible members, that remaining number constitutes the quorum. Amending release.

The SEC describes its objective as making agency rulemaking more flexible and final. It points to past periods with fewer than three commissioners and recurring disqualifications. Its original formal quorum rule, adopted March 30, 1995, already accommodated two members in office and two remaining after recusals. At that time, the Commission expressly considered single-member authority unnecessary. The new amendment extends the recusal provision to one. SEC’s explanation and rule history.

The SEC used a final rule without public comment, treating the change as agency management and organization. Corporate-governance site corpgov.net says it filed a Rule 192 petition seeking rescission or suspension and public comment. It also seeks to restrict single-member authority to ministerial or urgent matters, excluding rulemaking, enforcement authorizations and contested adjudications. That is the site’s petition and commentary, not an SEC decision or court ruling. Corpgov.net’s account.

There is precedent for two commissioners. In Falcon Trading Group, Ltd. v. SEC, No. 96-1052, decided December 20, 1996, the D.C. Circuit rejected a challenge to an SEC decision issued when only two commissioners held office. It upheld the quorum defined by the agency’s regulations. That case validated a two-commissioner quorum; it did not validate a one-commissioner quorum. Court opinion.

Peirce leaves a concentrated leadership structure

Peirce announced her resignation September 25, effective October 2. Known as “Crypto Mom,” she has led the Crypto Task Force since February 4, 2025. Her second term expired in June 2025, and she continued under holdover rules allowing approximately 18 additional months. She plans to join Regent University School of Law as an associate professor in November. Departure report.

Atkins and Uyeda, both Republicans, will fill two of five SEC seats. The CFTC has had just one commissioner, Chair Michael Selig, since Caroline Pham’s December 2025 departure. Together, the agencies will have three commissioners and seven vacancies. No replacement for Peirce has been named. A White House official said nominations were intended soon, while CNBC reported that four CFTC candidates had been vetted. Staffing and nomination reporting.

A two-member SEC can approve rules, enforcement recommendations, settlements and formal investigative orders. Both members must participate and agree; a one-to-one split prevents action. Once the amendment is effective, a disqualification can instead leave the other commissioner empowered to act alone on that matter. Disagreement itself does not create that exception. Two-member operating mechanics; September amendment.

The practical reading is that the SEC remains capable of acting, with each vote carrying more weight. Fewer people participate in the decision, but either remaining member can stop an ordinary two-member approval by disagreeing. Vacancies therefore do not establish whether a particular crypto rule will pass. Quorum analysis.

October 20 is a comment deadline

Regulation Crypto Assets, File No. S7-2026-27, was proposed August 18 and published August 21. Its release numbers are 33-11434 and 34-106150. October 20 is the next concrete date for this proposal: the deadline for public comments, not the start of a new offering regime. SEC rulemaking docket.

The proposal creates two registration exemptions for certain investment contracts involving crypto assets. A startup exemption would permit up to $5 million over four years. A fundraising exemption, largely modeled on Regulation A, would permit up to $75 million per 12-month period. Both require narrative disclosures organized around principles; the larger exemption also requires financial statements and continuing reporting. Proposed offering framework.

A conditional safe harbor would treat a crypto asset as not subject to an investment contract for the relevant securities definitions when its conditions are met. A proposed qualified-purchaser definition would also preempt state registration and qualification requirements for covered offerings and certain secondary transactions. Federal antifraud and antimanipulation rules would still apply. Proposal details.

For a US account holder, the distinction is practical: proposed exemptions are not available merely because the comment deadline arrives. To finalize the regime, the SEC must consider comments and adopt a final rule. With two participating commissioners, both would need to agree. Proposal status; Voting mechanics.

Your US exchange account still has an IRS reporting calendar

SEC vacancies do not change the IRS reporting schedule. Form 1099-DA, Digital Asset Proceeds From Broker Transactions, implements broker reporting arising from the Infrastructure Investment and Jobs Act and Treasury/IRS regulations. Gross-proceeds reporting began with 2025 transactions; basis reporting phases in for certain 2026 transactions. IRS reporting framework.

For the 2025 tax year, most statements omit basis. The IRS’s January 28, 2026 reminder says brokers send customers the same information furnished to the IRS, while customers must determine missing basis to calculate gains or losses. A gross-proceeds figure alone does not supply that calculation. IRS Tax Tip 2026-07.

For 2026 onward, brokers generally report proceeds, with mandatory basis reporting for covered assets and optional basis reporting for noncovered assets. A covered asset generally was acquired from January 1, 2026 onward in the same broker’s custodial account and remained there until sale. Earlier purchases and assets transferred from another exchange or personal wallet are generally noncovered. Your exchange may therefore report a sale without supplying its acquisition cost. 2026 instructions.

Voluntary noncovered-basis reporting receives protection from sections 6721 and 6722 penalties when the broker checks the noncovered box. Limited reporting exceptions also apply: payment processors have a $600 annual PDAP threshold, above which all relevant sales are reported. Qualifying stablecoins have a $10,000 threshold under the optional method. Specified NFTs have separate optional treatment, including separate forms for creator or minter first sales and other sales. These are reporting rules, not blanket tax exemptions. Broker instructions.

Notice 2024-57 temporarily excepts certain transactions, including lending, liquidity provision and wrapping or unwrapping, from broker reporting pending further guidance. Rewards and other participant compensation fall outside that exception. Real estate broker reporting also applies to relevant closings from January 1, 2026. IRS broker guidance.

Pull complete histories from every exchange and wallet, including acquisition records behind noncovered lots. Reconcile those records with each statement before calculating gains and losses. Revenue Procedure 2024-28 provides a transition mechanism for allocating unused basis to holdings remaining on January 1, 2025; retain supporting records where that allocation affects older lots. IRS recordkeeping and transition guidance.

The IRS’s January 7 notices excluded 2025 Forms 1099-DA from the Combined Federal/State Filing Program and corrected instructions on reporting thresholds and optional methods. Keep that federal/state distinction in view when reviewing the documents supplied by your exchange. Form developments.

A 1099-DA does not transfer your reporting duty to the broker. Report required income, gains and losses even without a form, and answer the return’s digital asset question. Because the IRS receives the broker’s information too, unexplained differences can lead to mismatch letters. Reconcile discrepancies and retain supporting records; a missing basis entry does not resolve your tax position. IRS taxpayer reminder.

ETF demand does not settle the rulemaking question

US spot Bitcoin ETFs received $66.2 million in net inflows on September 29, their ninth consecutive positive session. IBIT supplied $51.1 million and ARKB $33.2 million, offset by $18.1 million leaving BITB. September 29 flow report.

Those purchases describe investor demand. They do not establish how the remaining commissioners will vote. For US holders, the concrete regulatory checkpoint remains October 20’s comment deadline, while account records and basis documentation remain necessary under the separate IRS framework. SEC calendar; IRS responsibilities.