The agency reassigns staff as its enforcement approach toward crypto faces scrutiny.
SEC Reduces Crypto Enforcement Unit
The US Securities and Exchange Commission (SEC) is reportedly downsizing its 50-member crypto enforcement unit. According to a Feb. 4 report by The New York Times, some lawyers will be reassigned to other departments, and a senior attorney has already been moved out of the enforcement arm. Sources claim this was perceived as an unfair demotion. An SEC spokesperson declined to comment on the matter.
Hester Peirce Criticizes SEC’s Past Approach
SEC Commissioner Hester Peirce recently outlined a shift in the agency’s crypto regulatory strategy. She described the previous approach as “careening” down the road while “slamming on the enforcement brakes.” Peirce emphasized that the newly established Crypto Task Force aims to create a more structured and less disruptive regulatory environment.
On ending the SEC’s enforcement actions: be patient because this isn’t straight forward. “Throughout this time, the Commission’s handling of crypto has been marked by legal imprecision and commercial impracticality. Consequently, many cases remain in litigation, many rules…
SEC’s Crypto Enforcement Record in 2024
In 2024, the SEC pursued 33 enforcement actions against 90 defendants and respondents in the crypto sector, as reported by Cornerstone Research. The agency had focused on addressing noncompliance among major crypto asset trading platforms. This shift in enforcement tactics raises questions about future regulatory priorities.
Leadership Changes Influence SEC’s Direction
The reduction in crypto enforcement coincides with significant leadership changes at the SEC. Chief enforcement officer Gubir Grewal stepped down in October 2024, fueling speculation about a softer regulatory stance. His deputy, Sanjay Wadhwa, was promoted to acting director but resigned on Jan. 31 after a 21-year tenure. Additionally, former SEC Chair Gary Gensler resigned on Jan. 20, marking a new chapter for the agency’s approach to crypto oversight.
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