The SEC is scaling back its special unit of more than 50 lawyers and staff members that were responsible for bringing crypto enforcement actions, according to a Feb. 4 New York Times report citing people with knowledge of the matter.
Some of the lawyers in the crypto enforcement unit are being assigned to other departments in the agency, the report noted, adding that one of its top litigators was moved out, with others describing the move as “an unfair demotion.”
One of the first things the new SEC chair, Mark Uyeda, did was establish a team to review the regulator’s approach to dealing with digital assets. The new task force is led by pro-crypto Commissioner Hester Peirce.
The SEC is scaling back its crypto enforcement unit. Some in a special unit of 50 lawyers and staff that had been dedicated to bringing enforcement actions are being reassigned, according to just-published NYT article. pic.twitter.com/W8fU5jAFJw
The SEC has “relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way,” the agency wrote at the time.
One of President Trump’s first executive orders signed on Jan. 23 was aimed at promoting the growth of crypto and “eliminating regulatory overreach” from financial regulators over the past few years.
One of the order’s policies was to provide “regulatory clarity and certainty built on technology-neutral regulations, frameworks that account for emerging technologies, transparent decision making, and well-defined jurisdictional regulatory boundaries.”
The SEC downsizing news comes hours after Hester Peirce outlined the regulator’s new approach to crypto markets and reconsidering whether certain crypto assets are securities.
She said that the task force’s main priorities were examining the security status of crypto assets, identifying areas outside of SEC jurisdiction, addressing token offerings, improving registration pathways, and updating broker-dealer regulations.
It would also clarify custody solutions for investment advisers, provide clarity on crypto lending and staking, and review crypto exchange-traded products, she said.
The crypto Task Force webpage is live. Join us for the drive (toward crypto clarity): https://t.co/o2jzNUhJ5D and https://t.co/9AwTYkmOCw
On Feb. 4, President Trump’s “Crypto Czar,” David Sacks, held his first press conference alongside a number of senators.
He introduced the GENIUS Act, focusing on stablecoin regulation and establishing clear regulatory frameworks, and announced the formation of a joint House-Senate working group on crypto legislation.
The main objectives were to keep crypto innovation within the United States, create regulatory clarity, foster blockchain development, and harmonize regulations across agencies such as the SEC and CFTC.
The key takeaway from today’s press conference led by @DavidSacks:
Congress is serious about passing stablecoin legislation.
ABOUT TIME!
Stablecoin legislation will not only benefit consumers and reinforce US dollar dominance abroad, it will move millions of people onchain
However, despite all of the positive developments, crypto markets have fallen 4% on the day, with total capitalization dropping to $3.3 trillion.
Bitcoin dipped to an intraday low of $96,000 before recovering to trade just below $98,000 during the Wednesday morning Asian session.
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