Trump's SEC Scales Back Crypto Enforcement, Sparks Industry Cheers and Critics' Concerns

The U.S. Securities and Exchange Commission (SEC) is reportedly scaling back its crypto enforcement unit, according to a New York Times report. The move comes as the Trump administration is set to ease regulations on the cryptocurrency industry. Sources close to the matter have revealed that some team members are being reassigned, with one top lawyer moved out of the enforcement division, which some see as a demotion.

The shift is part of a broader effort by President Donald Trump to "eliminate regulatory overreach" on crypto and "secure America's position as the world's leader in the digital asset economy." Acting SEC Chair Mark Uyeda, a Republican, has already formed a task force to review crypto rules and appointed SEC Commissioner Hester Peirce, a known crypto supporter, to lead it. However, some view the latest changes as a move to remove the "speed limits and guardrails" that have shaped the SEC's approach to crypto.

Corey Frayer, a former senior adviser to Gensler, criticized the changes, saying, "What the new SEC leadership proposes to do for crypto is remove the speed limits and guardrails that have made our capital markets the strongest in the world." Meanwhile, Trump has nominated Paul Atkins, a longtime advocate for lighter regulations, to lead the SEC. His confirmation hearing is still pending.

During his campaign, Trump vowed to end sweeping crypto crackdowns, and reports suggest the SEC may dismiss certain digital asset-related litigations that do not involve financial fraud. The "SEC 2.0" appears to be charting a course long suggested by the crypto industry, one focused on clarifying regulatory oversight and establishing guidelines for cryptocurrencies and digital assets.