"SEC's New Policy: Commissioners Gain Power Over Enforcement Actions"

The U.S. Securities and Exchange Commission (SEC) has implemented a new policy requiring its enforcement staff to obtain approval from politically appointed commissioners before launching formal investigations. This change comes after a leadership transition at the SEC, with Mark Uyeda appointed as Acting Chair.

Under the new requirement, enforcement staff must secure permission from commissioners to issue subpoenas, demand documents, and compel testimony. Previously, staff members had the authority to initiate formal investigations independently, with SEC commissioners maintaining oversight of the process.

Tyler Warner, a former banking consultant turned NFT market analyst, believes the new system will prevent "rogue attacks" and make commissioners more discerning in approving investigations. However, there is a risk that legitimate cases of fraud may be missed or delayed.

Critics of the previous administration's approach, such as Marc Fagel, a retired attorney specializing in SEC enforcement and securities litigation, argue that the change is a step backward, making investigations slower and ultimately benefiting those committing fraud.

During Gary Gensler's leadership, the SEC increased regulatory actions against major crypto exchanges, focusing on allegations of fraud and securities law violations. This approach drew criticism from both the crypto sector and some lawmakers, who argued that Gensler's interpretations of securities laws were overly broad and vague.

Gensler maintained that the SEC's role was crucial in protecting investors from potential frauds and scams prevalent in the crypto space. However, his critics argued that this perspective led to a heavy-handed approach that could be seen as a war on crypto, raising concerns about whether such actions were justified or excessively punitive.