The US Securities and Exchange Commission (SEC) is gearing up for potential changes as President-elect Donald Trump transitions into office. According to Reuters, sources familiar with the matter revealed that SEC commissioners Hester Peirce and Mark Uyeda, known for their favorable stance towards cryptocurrencies, are considering revising the agency’s policies.
These changes could potentially halt enforcement actions against crypto firms and provide clarity on when cryptocurrencies qualify as securities. Ongoing enforcement cases involving prominent companies like Coinbase and Kraken are also up for review.
Bill Hughes, a lawyer at Consensys, commented on the possible shift in SEC policies, stating that the sources cited were likely well-informed about the new administration’s plans. He noted that Trump’s previous remarks on crypto align with the expected changes within the SEC.
The anticipated modifications coincide with the appointment of Paul Atkins, a former SEC commissioner and Trump’s nominee for SEC chair. Atkins has been an advocate for less stringent crypto regulations and has been involved with the Digital Chamber’s Token Alliance since 2017.
The incoming administration is expected to rescind accounting guidance that critics argue has deterred companies from holding cryptocurrencies for clients due to high compliance costs. While Peirce and Uyeda may start laying the groundwork for new regulations, reaching a consensus on crypto rules could be a lengthy process.
However, the potential rollback of enforcement actions has raised concerns about the politicization of regulatory processes. Critics fear that setting such a precedent could have long-term implications for the SEC’s credibility. Legal experts also caution that courts may oppose resolving complex legal battles related to the definition of securities.
Philip Moustakis, a partner at Seward & Kissel and a former SEC attorney, warned that halting enforcement actions or dismissing cases en masse would be unprecedented. This could potentially affect the SEC’s reputation in the long run. Robert Cohen, a partner at Davis Polk and a former SEC enforcement division employee, suggested that the regulator might reopen settlement negotiations in some ongoing cases.
Overall, the potential changes within the SEC under the new administration could have significant implications for the crypto industry. It remains to be seen how these adjustments will unfold and impact the regulatory landscape moving forward.