Trump's SEC Shakeup: Regional Directors Out, Crypto Enforcement Slowed

The Trump administration's cost-cutting initiatives have reached the Securities and Exchange Commission (SEC), with plans to eliminate regional office director roles. According to sources, the SEC informed its ten regional office directors on Feb. 21 that their positions would be removed as part of a broader government cost-cutting initiative. The move comes after the SEC's closure of its Salt Lake City office in June and follows a federal judge's imposition of $1.8 million in fines on the agency for "bad faith conduct" in its legal action against crypto firm DEBT Box.

The restructuring is happening amidst sweeping changes in US regulatory agencies following the return of Donald Trump to the presidency. His administration has prioritized federal budget reductions and government downsizing, spearheaded by the Department of Government Efficiency (DOGE). A DOGE-affiliated account on Elon Musk's social media platform X posted on Feb. 18, encouraging the public to report instances of waste, fraud, and abuse related to the SEC.

The SEC requested $2.6 billion for the 2025 fiscal year in its budget justification plan to Congress in March. Senior SEC staff participated in a call on Feb. 20, where leadership indicated that several agency members were already coordinating with DOGE. Reports suggest that all departments must submit their reorganization proposals to acting chair Mark Uyeda by Feb. 25.

The SEC's regional offices span major financial and technology hubs like New York and San Francisco, as well as smaller cities like Atlanta and Boston, to facilitate local enforcement and corporate investigations. The decision to remove regional directors will require a vote from the SEC's three-person commission, composed of two Republicans, Mark Uyeda and Hester Peirce, and one Democrat, Caroline Crenshaw.

In addition to the restructuring, the SEC has started rolling back its enforcement efforts, particularly its previous regulatory focus on cryptocurrency under former chair Gary Gensler. The agency has downsized its crypto enforcement division and halted multiple lawsuits against crypto-related entities. Reports also indicate that its former lead crypto litigator has been reassigned to the SEC's IT department.

The SEC recently closed its investigation into Robinhood Crypto less than a year after issuing the online brokerage a Wells notice. Robinhood announced on Feb. 24 that the SEC's Enforcement Division informed the company on Feb. 21 that it will not recommend any enforcement action. Dan Gallagher, Robinhood Mark