SEC to Overhaul Crypto Regulations Under New Leadership, Lawsuit Withdrawals Possible

The U.S. Securities and Exchange Commission (SEC) is set for a significant shift in cryptocurrency policy as President-elect Donald Trump appoints new leadership to the agency.

On January 15, Reuters cited three sources familiar with the matter, reporting that senior Republican officials at the SEC may begin a comprehensive revamp of crypto regulations once Trump assumes office next week.

Two sources stated that SEC Commissioners Hester Peirce and Mark Uyeda are considering drafting guidelines or regulations to clarify the criteria for treating cryptocurrencies as securities. They are also expected to review some ongoing enforcement actions against the crypto industry.

New Leadership to Shift Policy Direction

Trump’s nominee for SEC Chair, crypto-friendly former Commissioner Paul Atkins, is anticipated to end the agency’s aggressive enforcement stance toward the crypto sector. However, his confirmation by the Senate remains uncertain.

Outgoing SEC Chair Gary Gensler, known for his stringent regulatory approach, will step down on January 20. His tenure has been marked by frequent clashes with the crypto industry.

Peirce and Uyeda, who have publicly criticized Gensler’s hardline stance and expressed support for pro-crypto policies, are expected to form a temporary majority on the SEC starting next week.

According to former SEC officials, Atkins has a long-standing relationship with Peirce and Uyeda, dating back to his tenure at the SEC from 2002 to 2008. This close connection could facilitate swift policy changes.

Potential Lawsuit Reviews and Policy Adjustments

The SEC has initiated at least 83 enforcement actions against crypto-related entities, including major firms like Coinbase and Kraken. Two sources revealed that under the new administration, the SEC might review pending crypto lawsuits, potentially dropping cases unrelated to fraud.

Additionally, the SEC may repeal "accounting guidelines" that imposed excessive costs on publicly traded companies holding cryptocurrencies on behalf of third parties.

Peirce and Uyeda are reportedly in the early stages of drafting regulatory changes and plan to solicit input from the industry and the public.

With the crypto industry eager for regulatory clarity, the new SEC leadership could mark a turning point, balancing innovation with oversight while reconsidering the aggressive policies of the past administration.