Key dealers
- SEC reduces the size of its crypto enforcement unit during the Trump administration.
- The restructuring is part of the efforts to promote crypto growth and reduce supervisory surveillance.
The US Sec reduces the size of its crypto assets and cyber unit, which had grown to over 50 lawyers and staff under former chairman Gary Gensler’s leadership, according to a new Report From the New York Times, with reference to sources that are familiar with the change.
Lawyers from SEC’s dedicated crypto unit are redistributed to other departments, with at least one leading lawyer moving out of the enforcement department completely. The unit, formerly known as the Cyber Unit, was reinforced in May 2022 when Sec added 20 positions.
Reforms are ongoing at the US top agency. According to a new report from Reuters has Sec implemented a new policy requires its enforcement personnel to ensure approval from commissioners before initiating formal investigations, including the issuance of moods and mandatory testimonies.
This shift is a deviation from the previous policy where the staff can start investigations independently. The change aims to ensure more measured and evidence -supported investigations, but raises concerns about potential delays when addressing fraud.
The restructuring comes as part of the Trump administration’s ongoing effort to reduce the legislation for the crypto industry.
President Trump recently signed an executive order Aims to establish a regulatory framework that promotes innovation and economic growth related to digital assets, including the development of dollar supported Stablecoins and the ban between the central bank’s digital currencies (CBDC).
The order is also aimed at the creation of a working group to evaluate the potential establishment of a national digital asset reserve and to propose new regulations for the sector.
Mark Uyeda, Sec’s acting chairman, has set up a working group to review the agency’s regulations for digital assets and appointed commissioner Hester Peirce to lead the initiative. Peirce has criticized Sec’s previous strategy and describes it as “legal imprecision and commercial impractical.”
The crypto working group Focuses on clarifying the security status of the digital assets, facilitating certain tokens and simplifying crypto-related product registrations. The goal is to deal with regulatory issues in crypto loan, staking and custody services, while improving international regulatory cooperation.
The reduction affects a unit responsible for protecting investors in crypto markets, protecting the securities markets from cyber threats and maintaining violations of securities in crypto markets. The changes raise questions about waiting cases, including SEC’s trial against Coinbase to claim to act as an unregistered securities exchange.
The move has drawn mixed reactions. Corey Frayer, former senior adviser for Gensler on crypto issues, criticized the decision and claimed that it removes the necessary “speed limits and guardrails” from the market.
Conversely, the proponents of the crypto industry see it as a welcome step towards a more balanced regulatory environment.
