SEC set to scale back crypto enforcement, shifting focus to clearer regulations

The US Securities and Exchange Commission (SEC) has announced it is making some major changes when it comes to crypto enforcement. The agency is scaling back its efforts in this area, reducing the size of the unit responsible for taking legal action against crypto companies.

The unit, which had around 50 members, is being downsized and a major shake-up has already taken place, with one of the key lawyers handling crypto cases being pushed out of the enforcement division.

The changes weren’t exactly unexpected, especially after Gary Gensler stepped down as SEC Chair. Acting Chair Mark Uyeda and Commissioner Hester Peirce, both longtime critics of the SEC’s aggressive crypto enforcement, are taking the lead, and the agency is said to be shifting its approach.

Peirce is now heading up a new crypto task force, which is focused on creating clear and comprehensive rules for the industry. The task force has its own webpage on the SEC’s site. Some of its top priorities include figuring out how different digital assets should be classified (security vs. commodity), identifying areas that fall outside the SEC’s jurisdiction, working on a possible “safe harbor” for crypto tokens, and establishing proper custody rules.

The crypto Task Force webpage is live. Join us for the drive (toward crypto clarity): https://t.co/o2jzNUhJ5D and https://t.co/9AwTYkmOCw

— Hester Peirce (@HesterPeirce) February 4, 2025

At the same time, Peirce outlined 10 key priorities for the new task force. She also wants to create a more practical path for crypto companies to register with the SEC by tweaking the agency’s existing framework.

Other major goals include clarifying whether crypto lending and staking programs fall under securities laws and figuring out which parts of the crypto market are actually outside the SEC’s jurisdiction.

Peirce even compared the SEC’s past approach to crypto regulation to a chaotic family road trip—one filled with confusion and unexpected detours. But with this new task force, she hopes the journey will be “more enjoyable and less risky” than what the industry has experienced over the past decade.

She said: “On that last trip, the Commission refused to use regulatory tools at its disposal and incessantly slammed on the enforcement brakes as it lurched along a meandering route with a destination not discernible to anyone.”