Although Gary Gensler's tenure as chair of the U.S. Securities and Exchange Commission (SEC) and his era of 'regulation by enforcement' has ended, in the weeks leading-up to his departure, crypto firms have reported receiving multiple warnings from the regulator about potential enforcement actions. This has led some to speculate that the SEC was ramping up its enforcement efforts during this transition period before Trump's successor, Paul Atkins, officially took over.
In an exclusive interview with TheStreet Crypto, the CEO of Unicoin, a crypto firm that recently was warned by the SEC through an official Wells Notice, said that the agency was "committing a gross abuse of power"
"I feel that the SEC is yet again committing a gross abuse of power to repress crypto,” Alex Konanykhin, Unicoin CEO, told TheStreet Crypto. “I’m hopeful that, after Inauguration Day, the new commission won’t continue Gary Gensler’s fight against progress; the same fight that led to his inglorious resignation and to 18 states suing the SEC for unconstitutional overreach. We are well-positioned to help facilitate President Trump’s mission of making America the capital of crypto and to contribute to the increased prosperity of the country in the year ahead.”
Although other crypto industry figures are not surprised by the wave of enforcement actions continuing, Joe Doll, the General Counsel for Magic Eden, told TheStreet Crypto: "It's concerning that this is the second Wells announcement [around this time], but it's not surprising to see the SEC continue its regulation-by-enforcement approach."
“[T]he SEC's enforcement actions against fraudulent actors are welcomed by legitimate actors in the space and something we can expect an SEC with Atkins at the head to continue,” he told TheStreet Crypto.
Atkins, a prominent pro-crypto advocate who previously served on the board of the Digital Chamber of Commerce, supports the involvement of crypto firms in the regulatory process. In 2009, he testified before the Senate Banking Committee, stating, “More regulation, for regulation's sake, is not the answer. We need smarter regulation.” His tenure will likely emphasize increased public input from crypto firms, thorough cost-benefit analyses, and an adherence to the SEC's legislative mandate. As a longtime critic of overregulation, Atkins has consistently favored strategies that allow firms to raise public funding and foster innovation.
“The recent Wells Notices against Unicoin and CyberKongz could be a sign that Gensler wants to take one last swipe at the industry before his departure,” Lee Bratcher, the president and co-founder of the Texas Blockchain Council, told TheStreet Crypto. Alternatively, Bratcher continued, "given the fraud allegations in the Wells Notice, it could be that there are additional factors that led to this pending enforcement action."
“However, with Gensler's [term ending], it is unclear whether the agency will have time to file its lawsuit before Paul Atkins enters office," Bratcher pointed out ahead of Gensler's departure. "The facts of the case for Unicoin, in particular, are different than the lawsuits against large exchanges like Coinbase and Kraken, since Unicoin’s token is, by their own admission, a security.”