TL;DR
- The SEC is downsizing its crypto enforcement unit, reallocating staff to other departments as part of a broader effort to reassess its approach to digital assets.
- The restructuring includes a new policy requiring enforcement staff to get approval from commissioners before initiating formal investigations.
- The move aligns with the Trump administration’s push to promote crypto growth, with mixed reactions from industry experts.
The U.S. Securities and Exchange Commission (SEC) is reportedly scaling back its crypto enforcement unit, reducing the team from over 50 lawyers and staff members to a smaller group. This move comes as part of a broader effort to reassess the SEC’s approach to digital assets and reduce regulatory oversight.
Internal Reassignments and New Policies
Lawyers from the SEC’s dedicated crypto unit are being reassigned to other departments within the agency, with at least one senior lawyer moving out of the enforcement division entirely.
The restructuring follows a new policy requiring enforcement staff to secure approval from commissioners before initiating formal investigations, including issuing subpoenas and compelling testimony. This shift aims to ensure more measured and evidence-backed investigations but has raised concerns about potential delays in addressing fraud.
Focus on Regulatory Clarity and Innovation
The downsizing aligns with the Trump administration’s ongoing efforts to promote crypto growth and reduce regulatory oversight. Acting SEC Chair Mark Uyeda has established a task force to review the agency’s digital asset regulations, appointing Commissioner Hester Peirce to lead the initiative.
The task force focuses on clarifying digital assets’ security status, easing certain token offerings, and simplifying crypto-related product registrations.
Mixed Reactions from Industry and Experts
The decision has drawn mixed reactions. Critics argue that it removes necessary “speed limits and guardrails” from the market, while proponents see it as a positive step towards a more balanced regulatory environment.
The restructuring also raises questions about the future of pending cases, including the SEC’s lawsuit against Coinbase for allegedly operating as an unregistered securities exchange.
The SEC’s downsizing of its crypto enforcement unit reflects a significant shift in the agency’s approach to digital assets. As the crypto industry continues to evolve, the SEC’s new task force aims to create a regulatory framework that fosters innovation while protecting investors.
