Crypto's Big Break: How Rules Relaxed Under Trump's Watch
SEC Eases Up on Crypto Cases
Trump's return to the White House brought a significant change for the crypto world. The SEC, which regulates financial markets, started going easy on crypto cases. It paused, reduced penalties, or even dropped over 60% of the ongoing cases. This is unusual because the SEC rarely backs down from cases against a whole industry.
SEC's Shift Favors Trump-Tied Crypto Firms
The SEC's shift was especially noticeable with crypto firms tied to Trump. The agency no longer pursues cases against firms connected to Trump's family or his political causes. All the remaining cases are against smaller, less-known defendants.
SEC Denies Political Influence
The SEC claims politics had nothing to do with this change. It says the shift was due to legal and policy reasons. The agency also mentioned that its current Republican commissioners disagreed with most crypto cases before Trump even supported the industry.
Trump's Administration Friendly to Crypto
Trump's administration has been friendly to crypto. It promised to stop aggressive enforcement actions that could slow down crypto innovation. The SEC's pullback has been good news for crypto firms, but some former SEC lawyers are worried. They think the agency is leaving investors unprotected.
SEC Filings Drop Dramatically
- During Biden's time, the SEC filed about two crypto cases a month.
- In Trump's first term, it was about one a month.
- Since Trump's return, the SEC hasn't filed any new crypto cases.
Instead, it has continued filing cases against other types of defendants.
New SEC Chair Defends Changes
The new SEC chair, Paul S. Atkins, says the agency is just correcting the overzealous stance of the previous administration. But some career SEC lawyers see this as a dangerous move. They fear it could harm consumers and threaten the financial system.
Former SEC Lawyer Criticizes Retreat
Christopher E. Martin, a former senior trial counsel at the SEC, called the agency's retreat a "complete surrender." He believes the SEC has left investors to fend for themselves.
