"SEC Scales Back Crypto Enforcement, Shifts Focus to Security Evaluation"
1min read The U.S. Securities and Exchange Commission (SEC) has announced significant changes to its crypto enforcement unit, signaling a shift in regulatory approaches towards the industry. The SEC is scaling back its crypto enforcement unit, which previously consisted of over 50 lawyers and staff, according to reports from The New York Times. Some lawyers from the unit are being reassigned to other departments within the SEC, while one of the unit's top lawyers has been moved from the enforcement arm, which some sources described as an unfair demotion.
These changes come as the SEC's new approach to regulating the crypto markets is being outlined by Commissioner Hester Peirce. In a recent speech, Peirce criticized the SEC's previous approach as "careening down the road while incessantly slamming on the enforcement breaks." She suggested that the new approach would be more enjoyable and less risky for the industry, focusing on evaluating the security status of crypto assets and potentially providing "retroactive relief" for certain token offerings.
In addition to these changes, the SEC has implemented a new policy requiring its enforcement staff to secure approval from commissioners before initiating formal investigations, including issuing subpoenas and compelling testimony. This shift aims to ensure more measured and evidence-backed investigations but raises concerns about potential delays in addressing fraud.
The SEC's crypto enforcement unit was established in 2017 under former Chair Jay Clayton and expanded under former Chair Gary Gensler. The unit was responsible for protecting investors in crypto markets, safeguarding securities markets from cyber threats, and enforcing securities law violations in crypto markets. The changes to the unit raise questions about pending cases, including the SEC's lawsuit against Coinbase for allegedly operating as an unregistered securities exchange.
Mark Uyeda, the SEC's acting chair, has established a task force to review the agency's digital asset regulations, appointing Commissioner Hester Peirce to lead the initiative. Peirce has criticized the SEC's previous approach, describing it as "legal imprecision and commercial impracticality." The crypto task force focuses on clarifying digital assets' security status, easing certain token offerings, and simplifying crypto-related product registrations. Its goal is to tackle regulatory issues in crypto-lending, staking, and custodial services while enhancing international regulatory collaboration.
The SEC's new approach to regulating the crypto industry is a significant shift from its previous enforcement-focused strategy. As the industry continues to grow and evolve, the SEC's new
