SEC Undertakes ‘Unprecedented’ Rollback of Crypto Enforcement

Has the SEC’s war on the cryptocurrency sector ended in a surrender?

As Bloomberg News reported Friday (Feb. 28), the Securities and Exchange Commission (SEC) has in the last month dismissed or halted at least eight cases against crypto firms, including some of the industry’s most high-profile names.

That includes the back-to-back lawsuits against Coinbase and Binance, along with threats of possible action against companies such as Robinhood.

“It’s a multifaceted demolition of the most successful SEC enforcement program in history,” John Reed Stark, an SEC enforcement attorney-turned-consultant, told Bloomberg.

Since President Donald Trump took office, Stark said, the regulator’s stance has been:

“We’re going to grind to a screeching halt every single aspect of the SEC crypto enforcement program in a manner that’s not just unprecedented and unusual, it’s beyond imagination.”

However, others say the Trump administration’s approach to crypto has been a welcome change from the Biden White House’s more aggressive view of the industry.

“It seemed like the SEC on a whim could wake up on the wrong side of the bed and decide to bring in enforcement action or to file a Wells notice, or subpoena for information. That fear seems to have gone away, especially in light of these dismissals,” said Cathy Yoon, general counsel for Wormhole Foundation, an organization that supports blockchain development.

In announcing the dismissal of its case against Coinbase last week, the SEC said the move was part of an effort to reform its regulatory approach to the crypto industry, which includes its creation of a Crypto Task Force to come up with a regulatory framework for crypto assets.

“For the last several years, the Commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public,” SEC Acting Chairman Mark T. Uyeda said in a news release. 

“It’s time for the Commission to rectify its approach and develop crypto policy in a more transparent manner. The Crypto Task Force is designed to do just that.”

The SEC sued Coinbase in June 2023, alleging that the exchange had violated securities laws, and that its business “intertwines the traditional services of an exchange, broker, and clearing agency” without registering those functions with the SEC, as the law required.

The agency has also recently replaced its crypto division with a new, and smaller, Cyber and Emerging Technologies Unit, devoted to probing a range of issues beyond digital assets.

The post SEC Undertakes ‘Unprecedented’ Rollback of Crypto Enforcement appeared first on PYMNTS.com.