SEC Appoints New Leaders, Signals Shift in Crypto Regulation

The Securities and Exchange Commission (SEC) has announced two significant leadership appointments that are expected to influence the regulatory landscape for digital assets. Brian T. Daly will assume the role of Director of the Division of Investment Management on July 8, while Kurt Hohl will take over as Chief Accountant on July 7. These appointments come after the appointment of crypto-friendly Paul Atkins as Chairman of the SEC in April, marking a notable shift in leadership that is being welcomed by the digital asset industry.

Brian Daly brings extensive experience in the investment management legal sphere, having held senior roles at Akin Gump and Schulte Roth & Zabel, as well as in-house compliance leadership positions at top-tier funds like Millennium Partners and Raptor Capital. His appointment suggests a potential shift toward rulemaking that is more aligned with industry dynamics, including the evolving strategies of digital assets within traditional fund structures. Atkins highlighted Daly's deep familiarity with the investment management industry, noting that Daly is eager to tailor regulation within statutory authority while maintaining strong compliance expectations for advisers and fund managers. Daly's background indicates a regulatory approach grounded in legal precision and institutional pragmatism, which could influence the evaluation of crypto-related fund products, such as spot ETH or BTC ETFs.

Kurt Hohl, with nearly four decades of auditing experience, including a lengthy tenure as a partner at Ernst & Young, will focus on strengthening accounting standards and transparency. Hohl previously served at the SEC in the 1990s, where he authored the foundational Financial Reporting Manual. His return to the SEC signals a renewed emphasis on rigorous reporting and clarity in financial statements, which is particularly relevant for crypto-native companies navigating IPOs or stablecoin disclosures. Atkins noted that these appointments position the SEC to respond more effectively to both innovation and investor protection in rapidly evolving capital markets.

Under Atkins' leadership, the SEC has already taken steps to withdraw or delay several prominent cases against crypto firms. The agency dropped its lawsuits against Coinbase and Cumberland DRW earlier this year, and a separate investigation into Uniswap Labs closed in February without enforcement action. Last week, the SEC also closed its investigation into CyberKongz, a prominent Ethereum-based NFT and gaming project, with no enforcement action taken. More recently, the SEC announced it would not pursue further legal action against Richard Schueler, better known as Richard Heart, the founder of Hex, PulseChain, and PulseX. These actions indicate a more lenient regulatory stance under the new leadership, which could foster a more supportive environment for digital asset innovation.