The Securities and Exchange Commission (SEC) is set to reduce the size of its crypto enforcement unit, which currently consists of over 50 lawyers and staff. The report indicates that several members are being reassigned to other departments within the agency. Notably, one of the unit’s leading litigators has been transferred, a move some insiders describe as "an unfair demotion."
Upon taking office, the new SEC chair, Mark Uyeda, established a review team dedicated to re-evaluating the agency’s approach to digital assets under the leadership of crypto-advocate Commissioner Hester Peirce.
Historically, the SEC has leaned on enforcement actions as a primary regulatory tool for the crypto industry. This approach, the agency states, often involved innovative and sometimes untested legal interpretations. An executive order from President Trump on January 23 aims to nurture crypto growth by reducing regulatory overreach, advocating for clarity and certainty through technology-neutral regulations.
The SEC's recent downsizing announcement coincides with a shift in regulatory strategy. Hester Peirce has detailed a fresh approach, prioritizing the categorization of crypto assets, differentiating SEC jurisdiction, reviewing token offerings, and refining broker-dealer regulations.
In a related development, President Trump's appointed "Crypto Czar," David Sacks, introduced the GENIUS Act during a February 4 press conference, alongside several senators.
This act aims to establish a clear regulatory framework for stablecoins and thereby promote blockchain development, retain crypto innovation within the U.S., and synchronize regulations with other bodies like the Commodity Futures Trading Commission (CFTC).
Despite these advancements, the crypto market experienced a 4% dip, with the total market capitalization reducing to $3.3 trillion. Bitcoin reached a low of $96,000 intraday before stabilizing just below $98,000 in the Asian morning trading session.