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SEC Scales Back Crypto Enforcement Unit Amid Deregulation Push

The SEC is reducing its crypto enforcement unit as part of broader deregulation efforts under President Trump, impacting over 50 staff members and signaling a shift in regulatory approach.
Published on 2025-02-04

SEC Reduces Crypto Enforcement Unit

The Securities and Exchange Commission (SEC) is scaling back a dedicated crypto enforcement unit, which currently consists of over 50 lawyers and staff members. This move aligns with President Donald Trump's deregulation agenda, particularly in the digital assets space.

Personnel Changes and Reactions

Some lawyers from the crypto unit will be reassigned to other departments. However, the restructuring has drawn mixed reactions, with some individuals describing the changes as "unfair demotions." The shift reflects a broader effort to reevaluate the SEC's approach to crypto regulation.

Political and Regulatory Context

President Trump has been a proponent of crypto deregulation, recently signing an executive order to establish a regulatory framework while reducing "regulatory overreach" on digital assets. The move comes after Trump appointed Republican Mark Uyeda as acting SEC Chair, who quickly formed a team to review the agency's enforcement-focused strategy on crypto.

Ongoing Enforcement Actions

Despite the scaling back of the crypto unit, the SEC still has active enforcement cases against several crypto firms, including Coinbase. However, investors speculate that these cases may be dropped under the Trump administration, given its favorable stance toward the industry.

Key Figures and Implications

SEC Commissioner Hester Peirce, a vocal crypto advocate, leads the team reviewing the agency's enforcement approach. Meanwhile, former SEC Chair Gary Gensler had previously taken a stricter stance on crypto following high-profile crashes and frauds in 2022. Trump has nominated Paul Atkins, a lawyer supportive of lighter crypto regulation, to succeed Gensler.

Market Impact

The regulatory shifts have influenced crypto markets, with Bitcoin reaching record highs ahead of Trump's inauguration. However, the crypto asset traded down 4% to $97,564.7 by 18:31 ET (23:31 GMT), reflecting ongoing market volatility amid regulatory changes.

This move signals a significant shift in the regulatory landscape for crypto, with potential implications for enforcement, innovation, and investor confidence.

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