The U.S. Securities and Exchange Commission (SEC) is downsizing its crypto and cyber unit. These changes align with the Trump administration’s plans to ease cryptocurrency regulations.
Changes in Crypto and Cyber Unit
Under former Chair Gary Gensler, the unit grew to over 50 staff aggressively pursuing enforcement actions against crypto firms. Now, sources indicate that lawyers are being reassigned to other divisions, with at least one senior lawyer leaving the enforcement division entirely.
New Investigation Policy at SEC
The SEC has introduced a policy requiring commissioner approval before launching formal investigations. Previously, staff could issue subpoenas and compel testimony independently. This change aims to ensure that investigations are evidence-based, though critics argue it may slow enforcement actions, granting fraudulent actors more time.
Governance and Impact on Crypto Industry
SEC Commissioner Hester Peirce, known for her crypto-friendly stance, welcomes the SEC's new direction, criticizing the previous enforcement-driven approach. Her task force will focus on clarifying digital assets' security status, simplifying crypto product registration, and improving regulatory clarity for staking, lending, and custodial services.
The downsizing and changes at the SEC could lead to slower enforcement actions and clearer regulations in the crypto space. This aligns with the Trump administration’s efforts to encourage digital asset innovation and reduce government control.
