The U.S. Securities and Exchange Commission (SEC) is reportedly pulling back on its aggressive crypto enforcement strategy, scaling down its dedicated crypto unit and reassigning staff to other divisions. According to The New York Times, the shift comes amid broader leadership changes at the regulatory agency, signaling a potential shift in how the SEC approaches cryptocurrency regulation moving forward.

The SEC’s 50-person crypto enforcement unit, which was originally established to crack down on noncompliance in the crypto sector, is undergoing a restructuring. Some attorneys from the unit are being reassigned, while at least one senior lawyer was reportedly moved out of the agency’s enforcement division altogether—something insiders see as a possible demotion.

SEC Commissioner Hester Peirce, known for her more pro-crypto stance, recently criticized the agency’s previous enforcement-heavy approach. She compared it to “careening” down a road while repeatedly hitting the brakes. Peirce suggested that the newly announced Crypto Task Force should offer a more measured and constructive regulatory path, potentially including “retroactive relief” for certain token offerings that were previously flagged as securities.

The shake-up at the crypto enforcement unit comes amid significant turnover in the SEC’s leadership. Over the past few months, key officials have either stepped down or been reassigned:

  • Gurbir Grewal, the SEC’s former chief enforcement officer, left in October 2024. He had overseen over 100 enforcement actions in the crypto space.
  • Sanjay Wadhwa, the enforcement division’s deputy director, was promoted to acting director but stepped down in January 2025 after 21 years at the SEC.
  • Gary Gensler, the former SEC Chair, resigned on January 20, the same day President Donald Trump took office.

These departures, combined with the crypto unit’s downsizing, have led to speculation that the SEC may be softening its stance on crypto regulation.

Enforcement Numbers & Future Implications

Despite the shake-up, the SEC’s crackdown on crypto was extensive in 2024. The agency brought 33 enforcement actions against 90 defendants, according to data from Cornerstone Research. Many of these cases targeted major crypto exchanges and token issuers, reinforcing the SEC’s position that most crypto assets fall under securities laws.

However, with leadership changes and a shifting regulatory tone, the SEC may now be moving toward a more balanced approach—one that emphasizes compliance guidance over strict enforcement. This could be welcome news for crypto firms that have long criticized the SEC for a lack of clear regulatory frameworks.

Trump Creates a Working Group on Crypto Without Authority: Who’s Doing What There? | HODL FM
Trump establishes the “Presidential Working Group on Digital…
hodl-post-imageHODL FM: The Wildest Ride in the Crypto MarketKataryna Habeliia
hodl-post-image

Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice of this sort, HODL FM strongly recommends contacting a qualified industry professional.