The Securities and Exchange Commission is evolving to reduce a special unit of more than 50 lawyers and staff who had been devoted to winning cryptography measures, according to five people knowing the case.
This decision is one of the first concrete stages of President Trump and his administration to resume the regulation of cryptocurrencies and other digital assets. One of Mr. Trump’s first decrees aimed at promoting the growth of the crypto and “eliminating regulatory overtaking” on digital assets.
Certain lawyers of the cryptographic unit are assigned to other SEC departments, people said. One of the best lawyers in the unit was removed from the application division. Some of the people informed of the upheaval described this movement as an unfair demotion.
A SEC spokesperson refused to comment.
Mr. Trump, formerly a cryptocurrency critic, adopted digital assets during the 2024 presidential campaign and praised the support of the cryptographic community, who had come to see the previous president of the dry, Gary Gensler, as his sworn enemy n ° 1.
The acting president of the commission, Mark T. Uyeda, is a republican who tended to support the cryptographic industry. He made a series of meetings while shaking up other best dry jobs, which employs more than 1,000 lawyers.
One of the first things Mr. Uyeda has been to create a team to examine the dry approach to treat digital assets. The working group is led by Hester Peirce, SEC commissioner and a French crypto supporter.
In a position document published Tuesday on the SEC website, Ms. Peirce challenged the previous approach of the Commission to regulate the crypto and compared it to a cracking car.
“The treatment of the crypto by the commission was marked by legal imprecision and commercial impracticability,” wrote Ms. Peirce. She said that the objective of the working group would be to offer a regulatory framework that allows people to “experiment and build interesting things” without allowing the crypto to become “a paradise for fraudsters”.
We do not know what effect the effect of reducing the cryptographic unit will have on pending application measures. One of the most important cases was deposited in 2023 against Coinbase, accusing the cryptographic platform of having violated federal securities laws by operating as an unregistered exchange.
The Coinbase case is a test of the position of M. Pensler according to which most digital assets are securities contracts and subject to the monitoring of the dry, a position that Coinbase and the cryptographic industry categorically reject.
Corey Frayer, who was Mr. Pensler’s principal advisor about crypto problems and recently left the agency, said on Tuesday: “What the new DIA management offers for the crypto is to delete the limits of Speed and the railings that have made our strongest capital markets the strongest in the world.
The Cry Crypto application unit was created in 2017 during the first Trump administration, but it widen considerably during Mr. Pensler’s mandate. In May 2022, the agency announced that it almost doubled the size of the team at 50 dedicated positions. The unit had brought more than 80 application actions “linked to offers and platforms of fraudulent and unregistered crypto,” said the dry at the time. A recent count shows that he has brought more than 100 actions related to the crypto during the Biden administration.
Trump appointed Paul Atkins, a lawyer with close ties to the cryptography industry, to succeed Mr. Pensler. Mr. Atkins, who was the SEC commissioner under President George W. Bush, has long favored a lighter approach to regulation and application. The senatoric banking committee has not yet planned a date for its confirmation hearing.
Since Mr. Trump’s victory, cryptographic companies have mobilized to try to punish the officials of the SEC who have carried legal affairs against them. Brian Armstrong, Coinbase Director General, said on social networks that his business would not work with law firms who hired senior SEC officials who had been involved in the repression of the crypto.
Mr. Gensler, who left the dry the day Mr. Trump was inaugurated, joined the Faculty of Massachusetts Institute of Technology, where he had taught before President Joseph R. Biden Jr.
After the announcement, Tyler Winklevoss, one of the founders of the Gemini Crypto Exchange, said that his company did not engage any Graduate of MIT, even as trainees.
Alain Delaquerière contributed research.
