The U.S. Securities and Exchange Commission (SEC) is scaling back its cryptocurrency enforcement unit as part of the Trump administration's broader push to ease digital asset regulations.
According to reports from the New York Times, the SEC is reassigning staff from its specialized crypto enforcement team, which previously included over 50 lawyers and personnel dedicated to digital asset oversight. One senior attorney has already been transferred out of the enforcement division.
The downsizing aligns with President Trump's executive order aimed at "eliminating regulatory overreach" in the crypto sector to maintain America's competitive edge in the digital asset economy.
Acting SEC Chair Mark Uyeda has established a new task force to review the agency's approach to crypto regulation. Commissioner Hester Peirce, known for her pro-crypto stance, will lead this initiative. The task force's website outlines ten priority areas, including clarifying which cryptocurrencies qualify as securities versus commodities.
Critics of the changes, including former SEC senior adviser Corey Frayer, warn that reducing enforcement could weaken market protections. "What the new SEC leadership proposes to do for crypto is remove the speed limits and guardrails that have made our capital markets the strongest in the world," Frayer stated.
The administration has nominated Paul Atkins, who advocates for lighter regulations, as the permanent SEC chair, though his confirmation remains pending. Under the new direction, the SEC may dismiss certain digital asset cases that do not involve financial fraud.
This regulatory shift comes as Congress advances new crypto legislation. Senator Bill Hagerty recently introduced the GENIUS Act for stablecoin regulation, while various congressional committees form a bicameral group to lead cryptocurrency oversight efforts.
The changes mark a notable departure from the SEC's previous enforcement-focused approach under former leadership, reflecting the administration's goal to position the U.S. as a global leader in digital asset innovation.