Shift in SEC Enforcement on Cryptocurrency
John Reed, a former official with the U.S. Securities and Exchange Commission (SEC), has declared that the era of strict enforcement against cryptocurrency within the agency has effectively ended under the new administration. He expressed this sentiment through social media, stating,
“Stick a fork in SEC crypto-enforcement, it’s done.”
This shift comes after a significant rebranding of the SEC’s Crypto Assets and Cyber Unit, which was transformed into the Cyber and Emerging Technologies Unit earlier this year.
Revised Strategic Focus
Recently, Laura D’Allaird, the unit’s newly appointed head, outlined the SEC’s revised strategic focus. According to D’Allaird, the agency has segmented its priorities into three primary categories, with a prominent emphasis on addressing fraudulent activities associated with emerging technologies, including cryptocurrency and blockchain.
“The first bucket is…a focus on fraud across the emerging technologies space, looking to eliminate bad actors who misuse technology to exploit investors,”
she explained.
In addition to combating fraud, the unit aims to enforce compliance with cybersecurity standards and tackle misconduct linked to cyber activities, including the dark web and social engineering schemes. D’Allaird noted the necessity for the SEC to remain agile in responding to rapid technological advancements. She underscored a commitment to protecting investors while also promoting capital formation by distinguishing between genuine innovation and deceptive practices.
“We identify two main categories: those employing new technologies for fraudulent purposes and those repackaging traditional scams with new tech jargon—what I call ‘old wine in a new bottle.'”
Changes in Legal Approach
Moreover, reports from U.Today indicate that the SEC has scaled back or dropped significant legal actions against major cryptocurrency firms such as Coinbase and Ripple. In a related move, the SEC’s chief litigator, Jorge Tenreiro, has reportedly been demoted, further signaling a pivot in the agency’s enforcement strategy regarding digital assets.
