SEC Shifts Crypto Oversight: Top Litigator Reassigned Amid Industry Reorientation

The U.S. Securities and Exchange Commission (SEC) has restructured its crypto oversight, signaling a shift in its enforcement strategy. Jorge Tenreiro, the SEC's top crypto litigator, has been reassigned to an unspecified position in the IT Department. This move comes as the Commission seeks to reorient its relationship with the crypto industry, following the resignation of former Chair Gary Gensler.

Under Gensler's leadership, the SEC dramatically increased its legal battles against the crypto industry, leading to significant resentment. However, the Commission is now turning a new leaf, with Tenreiro's reassignment being a key indicator of this change. Tenreiro was the lead litigating counsel in the SEC's lawsuit against Ripple Labs, alleging that the company conducted an unregistered securities offering by selling XRP tokens. He also played a pivotal role in the SEC's action against Telegram, which resulted in halting the company's $1.7 billion unregistered digital token offering.

In addition to Tenreiro's reassignment, the SEC has substantially downsized its crypto enforcement unit, reassigning over 50 lawyers and staff. These changes have been brewing ever since Donald Trump's re-election. Since Gensler's exit, the commission has shown several hints to drop the Ripple case. Most recently, the SEC completely removed the lawsuit from its website. Reassigning Tenreiro to a non-crypto-related role further suggests that the lawsuit might be coming to an end.

Specifically, the SEC plans to replace Gensler's anti-industry litigators with a new Crypto Task Force. Yesterday, Commissioner Hester Peirce detailed its role, claiming that it will prioritize delegating certain enforcement functions away from SEC jurisdiction. Although this is ostensibly bullish news for crypto, it's still part of a worrying trend. Tenreiro was not a political appointee; he followed Gensler's directives. Many believe that publicly reassigning him like this is an act of humiliation, likely encouraging him to resign.