SEC Reduces Oversight of Crypto

The U.S. Securities and Exchange Commission (SEC) is reducing its specialized crypto unit. The agency is reallocating more than 50 attorneys and staff members focused on regulating digital assets, indicating how regulatory approaches will change under President Donald Trump.

Several members of the crypto unit have been transferred to different departments within the agency, according to a report by The New York Times citing several anonymous sources.

At least one senior attorney has been completely removed from the enforcement division, a move that some insiders described as ‘unfair demotion,’ according to the report.

The review of the crypto unit is part of the Trump administration’s efforts to limit government intervention in digital assets. Trump has promised to rein in regulatory oversight in the crypto sector since his presidential campaign and to make the U.S. a global leader in digital assets.

While the SEC has not yet responded to comments regarding the restructuring, Commissioner Hester Peirce, who now leads the agency’s newly established crypto task force, has signaled a significant shift in the agency’s priorities.

Peirce, a long-time advocate for clearer crypto guidelines, criticized the previous regulatory approach of the SEC in a statement on Tuesday, calling it ‘marked by legal imprecision and commercial impracticality.’

Known among industry insiders as ‘crypto mom,’ Peirce has promised to introduce a more balanced regulatory framework.

The staff reallocation also raises questions about ongoing SEC lawsuits against major crypto companies, including crypto giant Coinbase. The SEC sued the exchange in 2023, alleging that it operates as an unregistered securities platform.

That case has become a litmus test for former Chairman Gary Gensler‘s assertion that most cryptocurrencies should be classified as securities.

During Gensler’s tenure, several industry leaders pushed back, accusing the SEC of attempting to ‘illegally kill’ the crypto industry while refusing to provide clear regulatory guidance.

The SEC’s review is just one part of a broader effort by the Trump administration to establish cryptocurrency regulations.

Last month, the agency rescinded Staff Accounting Bulletin No. 121 (SAB121), a controversial policy that forced companies to treat cryptocurrencies held by users as liabilities.

Critics, including Peirce, have said that this rule unfairly burdens banks and prevents them from embracing digital assets.

In one of his first executive orders, the president established a presidential task force on crypto policy and completely banned the creation of a central bank digital currency (CBDC), which is a clear rejection of the idea of a ‘digital dollar.’