The U.S. Securities and Exchange Commission (SEC) is set to undergo a significant shift in its cryptocurrency policy under the incoming administration. The SEC is preparing to review its enforcement actions, potentially freezing or withdrawing cases that do not involve fraud allegations. This move would mark a stark departure from outgoing SEC Chair Gary Gensler’s aggressive stance on the crypto industry.

SEC Leadership Changes

President-elect Donald Trump’s pick for SEC chair, Paul Atkins, is expected to lead these changes. Known for his crypto-friendly views, Atkins is anticipated to work closely with Republican commissioners Hester Peirce and Mark Uyeda, both of whom have been vocal critics of Gensler’s regulatory approach.

Key Changes to Expect

Some of the key changes include:

  • Clarifying when a cryptocurrency should be classified as a security
  • Reviewing ongoing enforcement cases
  • Easing accounting rules that have discouraged companies from holding crypto assets on behalf of third parties

Some of these changes may take place as early as next week when Donald Trump becomes president. The SEC is also expected to seek public input to help draft new regulations tailored to the crypto sector. This effort reflects growing calls from the industry for clearer guidelines, as many companies argue that existing rules are outdated and ill-suited for decentralized digital assets.

The SEC’s Crypto Turnaround

During Gensler’s tenure, the SEC launched over 80 enforcement actions against crypto firms, alleging many tokens were unregistered securities. Critics say the crackdown stifled innovation, while others believe it was necessary to curb fraud and manipulation.

Industry observers expect the new SEC leadership to maintain a tough stance on fraud but adopt a more collaborative approach toward firms that comply with regulations. However, dismissing pending cases or rewriting existing rules could face legal and political challenges, potentially delaying the rollout of any changes.

Market Impact

Bitcoin has surged close to the $100,000 mark, driven by growing optimism around Trump’s crypto-friendly platform. With the SEC poised to reshape its regulatory approach, the U.S. crypto industry is bracing for a new and potentially more favorable landscape.

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