As newly elected President Donald Trump prepares to take office, the U.S. Securities and Exchange Commission (SEC) is preparing to initiate changes that could halt enforcement actions against crypto firms, Reuters reported, citing people familiar with the case.
Sources told the news outlet that SEC commissioners Hester Peirce and Mark Uyeda, known for their crypto-friendly stances, are ready to overhaul the agency’s policies.
The two commissioners are reportedly considering measures to clarify when crypto qualifies as a security measure and review pending enforcement cases, including some involving high-profile companies like Coinbase and Kraken.
Bill Hughes, an attorney at Consensys, accepted the sources cited were within the SEC and were aware of the new administration’s path. He said the information aligns with expectations created by Trump’s comments on crypto.
He added:
“Given how tight-lipped the SEC folks are in general, that’s really not a bad bet – then this isn’t credible and may have been passed on to Reuters to put pressure on the SEC leadership to change things starting next week. ”
New chair, different position
The expected changes come as Paul Atkins, former SEC commissioner and Trump’s pick for SEC chairman, is poised to take the reins after Senate confirmation. Atkins is widely regarded as an advocate of less restrictive crypto policies, having co-chaired the Digital Chamber’s Token Alliance since 2017.
Due to high compliance costs, the new administration is likely to revoke accounting guidelines that critics say have deterred companies from holding crypto for customers.
While Peirce and Uyeda may lay the groundwork for new regulations, reaching consensus on crypto rules could take months, if not longer.
Sources say the SEC may freeze or reevaluate some pending lawsuits, mainly cases that do not involve fraud allegations. This step could lead to settlements or even the withdrawal of cases in certain cases.
Potential challenges
The potential rollback of enforcement actions raises questions about the politicization of regulatory processes, with critics warning it could set a risky precedent. Legal experts note that courts may also resist resolving complex legal battles involving the definition of securities.
Philip Moustakis, a partner at Seward & Kissel and a former SEC attorney, stated that halting enforcement actions or dismissing cases en masse would be unprecedented and could have long-term implications for the SEC’s credibility.
Meanwhile, Robert Cohen, a partner at Davis Polk who previously worked in the SEC’s enforcement division, emphasized that the regulator could reopen settlement negotiations in some pending cases.
He added that crypto companies say the SEC under the Gary Gensler administration is refusing to discuss results based on a settlement.