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The U.S. Securities and Exchange Commission (SEC) could see a shift in its approach to cryptocurrency enforcement under the incoming Trump administration. Reports indicate that the SEC may freeze or withdraw pending crypto cases that do not involve fraud, signaling a possible departure from the aggressive stance taken by outgoing Chair Gary Gensler. This leadership transition follows President-elect Donald Trump’s announcement to appoint crypto advocate Paul Atkins as the new SEC Chair. Atkins is expected to work closely with Republican Commissioners Hester Peirce and Mark Uyeda, who have previously criticized Gensler’s handling of the cryptocurrency industry.
Gensler’s tenure was marked by over 80 enforcement actions, including lawsuits against major companies like Coinbase, Binance and Ripple Labs. The SEC accused these firms of securities law violations, often targeting practices like selling unregistered tokens or failing to register platforms as exchanges. Ripple Labs was notably accused of using XRP as an unregistered security to raise funds. Although some companies settled, others, including Ripple and Coinbase, have contested the SEC’s claims in court. The SEC recently filed an appeal in the Ripple case while its lawsuit against Coinbase is on hold pending another court decision.
Peirce and Uyeda are reportedly exploring changes to SEC rules to provide clarity on when cryptocurrencies qualify as securities. They are also considering revisions to accounting regulations that limit companies from holding cryptocurrencies for clients. Public consultations on crypto-specific rules may soon begin, which could address longstanding concerns about regulatory uncertainty in the industry.
The proposed changes have sparked varied reactions. Some see the potential for a more innovation-friendly regulatory environment, while others worry about reduced investor protections if cases are frozen or dismissed. Legal analysts caution that significant changes to existing rules may face hurdles in courts and Congress, which could slow their implementation.
Bitcoin prices have risen to nearly $100,000 amid optimism about Trump’s perceived crypto-friendly policies and campaign promises, including appointing a crypto and AI czar. The market expects the new SEC leadership to adopt a balanced approach, focusing on fraud prevention while fostering industry compliance and growth.
This transition represents a critical juncture for U.S. cryptocurrency regulation, with potential changes influencing enforcement actions and shaping the future of digital asset adoption and innovation. Observers anticipate that the incoming administration’s policies will leave a lasting impact on the crypto industry, setting the stage for regulatory and market developments in the years ahead.