Update (Feb. 5 at 12:15 am UTC): This article has been updated to include further background information about recent changes at the SEC.
The US Securities and Exchange Commission (SEC) is reportedly reducing the size of its crypto enforcement unit, which currently consists of 50 staff members. According to five individuals familiar with the matter, some lawyers from the crypto unit will be reassigned to other departments within the agency, as reported by The New York Times on Feb. 4. Additionally, one of the top lawyers in the crypto unit has been transferred from the SEC’s enforcement arm, which has been criticized as an unfair demotion.
When asked for comment, an SEC spokesperson declined Cointelegraph’s request.
This report comes shortly after SEC Commissioner Hester Peirce outlined the regulator’s new approach to regulating the crypto markets. As part of this approach, the SEC will evaluate the security status of crypto assets and may provide “retroactive relief” for certain token offerings.
Peirce compared the SEC’s previous approach to “careening” down the road while constantly hitting the enforcement brakes. She expressed the hope that the newly established Crypto Task Force will provide a more enjoyable and less risky journey compared to the SEC’s approach over the past decade.
According to Cornerstone Research, the SEC initiated 33 cryptocurrency-related enforcement actions against 90 defendants and respondents in 2024.
These recent changes to the SEC’s crypto enforcement unit follow a broader shakeup in leadership at the agency over the past few months, which has intensified since President Donald Trump took office on Jan. 20.
In October 2024, Gubir Grewal, the SEC’s chief enforcement officer, announced his resignation, leading to speculation that the SEC might adopt a more lenient stance towards crypto. During his tenure, Grewal recommended over 100 enforcement actions to address noncompliance in the rapidly expanding crypto space, including actions against the operators of the world’s largest crypto asset trading platforms, according to the regulator.
Sanjay Wadhwa, the deputy director of the enforcement division, was subsequently promoted to acting director but resigned from the agency just a few months later on Jan. 31 after more than 21 years with the SEC.
Former SEC Chair Gary Gensler also resigned from the agency on Jan. 20.