SEC Slashes Crypto Enforcement Unit

The U.S. Securities and Exchange Commission (SEC) is downsizing its crypto enforcement unit, reassigning more than 50 lawyers and staff members as the Trump administration reshapes the government’s approach to digital assets.

According to a New York Times report citing anonymous sources, several members of the crypto-focused enforcement team have been moved to other divisions, with at least one senior lawyer reportedly removed from enforcement altogether—a move some insiders called an “unfair demotion.”

The restructuring is part of President Donald Trump’s broader effort to scale back regulatory oversight in the crypto sector, a promise he made during his campaign. With Trump pushing for a pro-crypto stance, the SEC’s approach to digital assets is shifting dramatically.

Hester Peirce Leads the New SEC Crypto Task Force

While the SEC has yet to formally comment on the staff cuts, Commissioner Hester Peirce, now leading the agency’s newly formed crypto task force, has been vocal about the change in direction.

A longtime advocate for clearer and fairer crypto regulations, Peirce criticized the SEC’s previous stance, calling it “marked by legal imprecision and commercial impracticality.”

Industry insiders have often referred to Peirce as “Crypto Mom” for her support of digital assets. In a statement Tuesday, she compared the agency’s prior regulatory approach to “a car careening down the road,” pledging to introduce a more structured and balanced framework.

What Happens to SEC’s Crypto Lawsuits?

With the SEC shifting gears, questions arise about ongoing legal battles, including its landmark lawsuit against Coinbase.

The agency sued Coinbase in 2023, alleging that the exchange operated as an unregistered securities platform. The case became a litmus test for former Chair Gary Gensler’s view that most cryptocurrencies should be classified as securities.

During Gensler’s tenure, industry leaders repeatedly accused the SEC of trying to “unlawfully kill” crypto while refusing to offer clear legal guidelines. Now, with his regulatory framework unraveling, the future of such lawsuits remains uncertain.

The Trump Administration’s Crypto Overhaul

The SEC’s staff cuts are just one part of a larger regulatory shift. Last month, the agency scrapped Staff Accounting Bulletin No. 121 (SAB 121)—a controversial policy requiring banks to list customer-held crypto as liabilities.

Critics, including Peirce, argued that the rule unfairly discouraged banks from engaging with digital assets. Its removal signals a new era for crypto-friendly regulation in the U.S.

Meanwhile, Trump’s first executive orders on crypto policy have already made waves. His administration has:

• Banned the creation of a central bank digital currency (CBDC), rejecting a government-issued digital dollar.
• Established a presidential working group on crypto regulation to rewrite the rulebook for digital assets.

A Turning Point for U.S. Crypto Policy

With the SEC pulling back and a pro-crypto administration in charge, the regulatory landscape is changing fast.

For now, crypto firms may find more breathing room, but questions remain. Will past lawsuits be abandoned? Will new regulations support innovation while protecting investors?

As the U.S. shifts toward a more open stance on digital assets, the world is watching. And so is the market.