The Securities and Exchange Commission (SEC) has reduced its crypto enforcement team from over 50 lawyers, according to The New York Times. The move follows President Donald Trump’s executive order aimed at curbing regulatory overreach in digital assets, signaling a shift toward a more pro-business regulatory environment.
Acting SEC Chair Mark T. Uyeda appointed Commissioner Hester Peirce to lead a crypto regulation task force. Peirce, often called “Crypto Mom” for her support of blockchain innovation, has been critical of the SEC’s past enforcement-heavy policies.
On Tuesday, Peirce published a paper on the SEC’s website condemning the agency’s previous handling of crypto regulation as legally vague and commercially impractical. She emphasized the need for a regulatory framework that fosters innovation while preventing fraud. “The commission’s handling of crypto has been marked by legal imprecision and commercial impracticality,” Peirce wrote. “We must create an environment that allows for experimentation and technological progress, but will not be a haven for fraudsters.”
The crypto unit’s downsizing raises questions about lawsuits, including the SEC’s 2023 case against Coinbase challenging Gary Gensler’s crypto classification. It remains uncertain how the agency’s new direction will impact such cases.
Trump has nominated Paul Atkins, a former SEC commissioner and advocate for cryptocurrency, to replace Gensler. Atkins’ appointment is expected to further shift the SEC’s regulatory approach toward a more industry-friendly stance.
Industry leaders have welcomed the changes. Blockchain companies and crypto investors argue that the SEC’s previous aggressive enforcement stifled U.S. competitiveness in the sector. However, some consumer protection groups and Democratic lawmakers have raised concerns that reduced enforcement could lead to more scams and financial instability in the crypto markets.
Despite the SEC’s shift, Congress still faces pressure to establish clear legal guidelines for cryptocurrency regulation. Lawmakers on both sides of the aisle continue to debate the need for legislation that balances innovation with consumer protection. With a new leadership team at the SEC, the direction of crypto policy in the U.S. remains uncertain.
