The Securities and Exchange Commission’s aggressive stance toward the cryptocurrency industry may soon be replaced by a more dovish regulatory approach.
What happened: With the SEC chair Gary Gensler expected to leave office in January and president-elect Donald Trump preparing to name a new SEC chairman, the stage is set for a major change in how the crypto market is governed, according to the Wall Street Journal.
Gensler’s tenure has been marked by high-profile lawsuits against major crypto exchanges, including Coinbase COIN, Binance BNB/USD And Krakenfor allegedly operating unlicensed securities platforms.
However, the new administration’s pro-crypto stance suggests that this contradictory approach could be dismantled.
Trump’s return to the White House signals a potential transformation in US crypto regulation.
Once a critic of digital assets, he embraced the industry during his second term, pledging to position the United States as a leader in crypto.
Legal experts expect the next SEC chairman to seek to settle ongoing lawsuits and implement new rules tailored to the unique characteristics of digital assets.
Robert Stebbinssaid a former SEC general counsel and candidate for SEC chairman, “to the extent that there are no fraud claims, my feeling is that the commission would be likely to dismiss those cases at the future.”
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Gensler’s enforcement-focused legacy focused on targeting crypto exchanges as central players in what he saw as a non-compliant market.
Following the collapse of FTX and other major crypto companies in 2022, the SEC has stepped up its legal campaign, accusing exchanges of selling unregistered securities and violating investor protection laws.
While Gensler argued these actions were necessary to protect investors, critics say his approach was ineffective and created legal inconsistencies.
U.S. District Judge Amy Berman Jacksonin a partial ruling against the SEC’s lawsuit against Binance, noted that the “case-by-case, piece-by-piece” litigation strategy risked inconsistent results.
Industry executives have long argued that existing securities laws are inconsistent with the decentralized nature of cryptocurrencies.
Coinbase, one of the SEC’s top targets, has likened digital assets to collectibles such as baseball cards rather than securities.
The litigation has put significant pressure on exchanges, many of which have resisted settlements that would force them to delist the tokens or radically restructure their operations.
With Gensler’s departure, the crypto industry sees an opportunity for a regulatory reset.
Trump’s campaign promises include reducing regulatory burdens and promoting crypto innovation.
And then: Legal experts predict that a more collaborative regulatory framework could emerge, balancing investor protection with the sector’s need for clarity and growth.
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