Trump Appointees Set to Revise SEC Crypto Policies

TLDR

• SEC Republican commissioners Peirce and Uyeda set to gain majority control and revise crypto policies under incoming Trump administration
• Paul Atkins, a crypto advocate, selected as new SEC Chair to replace Gary Gensler
• Commissioners could freeze or withdraw non-fraud litigation starting next week
• Current SEC under Gensler launched 83 crypto-related enforcement actions
• New leadership expected to seek industry and public feedback on crypto regulations

The United States Securities and Exchange Commission (SEC) is preparing for a major leadership transition that could reshape cryptocurrency regulation in America. As President-elect Donald Trump readies to take office on January 20, 2025, the regulatory agency is poised for policy changes under new management.

Republican commissioners Hester Peirce and Mark Uyeda will soon hold the majority among the SEC’s politically appointed commissioners. This shift in power balance comes as Gary Gensler prepares to step down from his position as SEC Chair, making way for Paul Atkins, a former SEC commissioner under President George W. Bush.

The incoming leadership brings a notably different perspective on cryptocurrency regulation. Both Peirce and Uyeda have established reputations as crypto enthusiasts who have previously expressed concerns about overly restrictive regulations in the digital asset space.

According to sources close to the matter, the new commissioners may begin implementing changes to crypto policies as early as next week. One of their first actions could involve reviewing existing crypto enforcement cases, with the possibility of freezing or withdrawing cases that don’t involve fraud allegations.

The current SEC under Gary Gensler’s leadership has taken an aggressive stance toward crypto regulation, initiating approximately 83 enforcement actions against various players in the cryptocurrency industry. These actions have targeted major companies including Coinbase, Kraken, and Ripple Labs.

A central point of contention in many of these cases has been the classification of cryptocurrencies as securities. Many defendants have argued that their digital assets should be considered commodities rather than securities, highlighting the ongoing debate about when SEC rules should apply to cryptocurrency transactions.

The incoming Chair, Paul Atkins, brings a track record of advocacy for the cryptocurrency industry. His selection aligns with President-elect Trump’s stated goal of providing clearer guidelines for the crypto market, addressing a common criticism of Gensler’s approach to regulation.

Peirce and Uyeda’s connection to Atkins runs deep, as both served as his aides during his previous tenure at the SEC. This shared history suggests potential alignment in their regulatory philosophy and approach to cryptocurrency oversight.

The new leadership team is expected to initiate a rulemaking process that emphasizes industry participation. Sources indicate they plan to actively seek feedback from both industry stakeholders and the public in developing new regulatory frameworks.

This shift comes at a time when the cryptocurrency industry has been calling for clearer regulatory guidance. The current landscape has created uncertainty for many crypto companies operating in the United States, with some arguing that unclear rules have hampered innovation and growth in the sector.

The anticipated policy changes could affect numerous ongoing enforcement actions and investigations. However, the specific details of how existing cases will be handled remain unclear, particularly those involving alleged fraudulent activities.

The transition team is expected to begin their work immediately following the January 20 inauguration. Industry observers anticipate that initial policy changes could be announced within the first few weeks of the new administration.

The cryptocurrency market has been operating under heightened regulatory scrutiny during Gensler’s tenure, with the SEC launching enforcement actions against both large and small players in the space. These actions have ranged from allegations of operating unregistered exchanges to claims of selling unregistered securities.

Reports indicate that the new commissioners will prioritize establishing clear guidelines for determining when cryptocurrencies fall under SEC jurisdiction. This clarification could help address one of the industry’s main concerns about regulatory uncertainty.

The incoming leadership’s approach appears to focus on balancing regulatory oversight with industry growth, marking a departure from the current enforcement-heavy strategy.