SEC nominee Elad Roisman at a July 24th hearing before the Senate Banking Committee

Elad Roisman, a Republican from Maine, will become the fourth Trump appointment to the Securities Exchange Commission later today when the Senate votes to confirm him. In a hearing before the Senate Banking Committee in July, Roisman touched on what will be a series of landmark decisions on cryptocurrency made by the Commission, saying:

“…the SEC must examine and re-examine its rules, regulations and guidelines to ensure that they are still working as intended to accomplish the SEC’s mission. This is most recently manifested in areas such as data protection and cybersecurity, as well as the emergence of new investments and technologies such as initial coin offerings and blockchain. It is essential that the SEC approach these new challenges in a fair and transparent manner, provide clarity and certainty to the markets and investors, and enforce the laws and regulations that hold market participants accountable.”

In tradition with nominees before him, Roisman has mostly kept his own ideology close to the vest throughout the Senate confirmation process. With a little research, though, we can get some idea of where the incoming Commissioner might stand when it comes to the proposed Bitcoin ETFs. First, though, it’s important to look at the likely makeup of the SEC at the time the decisions are made.

Roisman is Trump’s second Republican appointment to the Commission and fourth appointment overall. The Trump SEC thus far is comprised of:

Chairman — Jay Clayton (I)

Commissioner — Robert Jackson, Jr. (D)

Commissioner — Hester Peirce (R)

Commissioner — Elad Roisman (R)

Although Chairman Clayton is officially listed as an Independent, he was appointed by a Republican and for all intents and purposes he is a Republican. The fifth Commissioner and last holdover from the Obama administration, Kara Stein, can’t serve past December. It’s been rumored Trump will nominate Democrat Allison Lee to replace Stein, but as of writing no nomination has been made. With Senate Democrats already on board for Roisman’s confirmation, however, Trump has little incentive to nominate a Democratic replacement for Stein at all. Conceivably the President could forego making another nomination, leaving a four-member Commission with a de-facto 3–1 Republican majority.

There’s no timetable for a decision on the recently announced reviews of three futures-based Bitcoin ETFs, but recent examples like the Winklevoss review, which took sixteen months, suggest a decision is unlikely before the end of the year. The much anticipated physical Bitcoin ETF, SolidX/VanEck, is due for a decision by early March. Decisions on all the Bitcoin ETFs could be issued at any time, but most likely they’ll come sometime after Commissioner Stein steps down in December.

The SEC has permanently delegated initial ETF decisions to the Division of Trading and Markets in order to clear the regulatory logjam created by an increasing number of applications. While the SolidX decision will be made by the Division, the opinions of the Commissioners will most certainly be a factor. Specifically the Division will consider the likelihood that the Commission initiates a review of their decision, and in such a review, how the commissioners would vote. Denying SolidX for the same reasons previous Bitcoin ETFs were denied — lack of regulation and perceived manipulation in the underlying Bitcoin market — would almost certainly result in another review and defeat the purpose of delegating decision in the first place. For that reason the initial SolidX decision should closely mirror the opinions of the seated Commissioners.