The US Securities and Exchange Commission (SEC) is reducing its strict oversight of the crypto market under the new Trump administration. A specialized unit is being downsized while new leadership adopts a more industry-friendly strategy.
Under Donald Trump's administration, the SEC is retreating from its stringent regulation of the crypto market. The specialized unit responsible for enforcing regulations is being reduced, and new leaders who are more open to the industry are implementing a more liberal policy. It remains unclear how this realignment will affect ongoing investigations and existing proceedings.
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Realignment of the SEC under Trump
Mark T. Uyeda has taken over leadership of the SEC and is pursuing a less stringent regulatory policy. Under his guidance, organizational restructuring is taking place, and the task force focused on crypto oversight is losing significance. Some lawyers and staff from the crypto unit are being reassigned to other departments, while one of the leading attorneys has left the enforcement team. This decision is viewed by some as an unjustified demotion.
Hester Peirce, a well-known advocate for the crypto sector, is now leading a new working group to evaluate past regulatory measures. In an official position paper, she criticized the SEC's previous approach as “legally imprecise and economically impractical.” Her goal is to develop a framework that fosters innovation without promoting fraud.
Uncertain future of crypto regulation
The impact of these changes on existing SEC lawsuits remains uncertain. In particular, the case against Coinbase, in which the platform is accused of operating as an unregistered exchange, continues to be a test case for the future regulatory strategy. Coinbase and other companies reject the SEC’s stance that most digital assets should be classified as securities.
With Paul Atkins being considered as a potential new SEC chairman, the policy could shift further in favor of the crypto industry. Atkins, a former SEC commissioner under George W. Bush, is known for his opposition to strict regulations. Reactions from the industry show that crypto companies are trying to sanction former SEC officials who advocated for stricter regulations. For instance, Coinbase CEO Brian Armstrong has stated that he will not work with law firms that previously represented the SEC. Other industry players are also distancing themselves from former regulators.
