A recent leadership change at the U.S. Securities and Exchange Commission (SEC) signals a significant shift in organizational priorities.
Under the new leadership, the SEC is expected to reduce its oversight of cryptocurrency and refocus on traditional securities fraud. According to Reuters, the SEC plans to end its cryptocurrency audits that have been ongoing for five years, reallocating resources to individual and corporate fraud cases instead.
Cryptocurrency Audits Take a Back Seat
The SEC’s new strategy includes a reduction in its stringent measures against the cryptocurrency market. The intense scrutiny the agency has applied to cryptocurrencies over the last five years will be replaced by cases focused on classic securities fraud. This decision reflects a more traditional approach, contrasting sharply with previous administrations.
Several significant issues regarding cryptocurrencies are also being reassessed, including whether memecoins should be classified as securities and the responsibilities of companies engaged in Proof-of-Work mining. The new administration signals a more flexible approach to these areas.
In addition, the former “Crypto Assets and Cyber Unit” has been disbanded and replaced by the “Crypto Task Force,” which aims to enhance communication with market participants. This new unit emphasizes resolving issues through dialogue rather than imposing harsh penalties.
Staff Reduction and Shift in Focus
Interim Executive Director Sam Waldon noted that the decrease in staff is a factor in the new strategy. Waldon’s statement about not being where they want to be creatively draws attention to resource limitations. This situation could complicate the SEC’s ability to monitor cases involving cryptocurrencies.
While cases like the Ripple
$ 2lawsuit previously dominated the SEC’s agenda, the new management is charting a different course. The initiation of Paul Atkins’ nomination process indicates that this shift has been institutionally embraced, as Atkins is known for favoring traditional securities regulations.
A noteworthy Freedom of Information Act (FOIA) request made by Coinbase also stands out. Coinbase is seeking disclosure of the financial impacts of strategic decisions made over the past five years, reflecting a demand for greater transparency regarding the SEC’s past practices in the cryptocurrency sector.
