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- The SEC prioritizes cases with imminent deadlines while pausing others, signaling a shift in its enforcement strategy.
- The formation of a Crypto Task Force and internal restructuring suggest the SEC is reassessing its approach to digital asset regulation.
The U.S. Securities and Exchange Commission (SEC) is slowing its aggressive stance on crypto-related litigation. According to Fox Business journalist Eleanor Terrett, the SEC has been focusing on cases with pressing Court deadlines, leading to delays in other lawsuits.
The legal battles with Kraken and Ripple remain on track with April and March deadlines respectively. Meanwhile the Lejilex and Binance lawsuits have been put on hold pending a possible settlement that could indicate a bigger change of course by the SEC’s enforcement team.
Crypto Task Force and Regulatory Overhaul
The SEC formed a new Crypto Task Force that can potentially reshape the way the regulator approaches the sector. The task force is also reportedly coordinating with the Congressional body and the Presidential Working Group on Digital Assets to craft a more defined digital asset regulation paradigm.
The SEC’s request to delay the case of Coinbase is a signal that the SEC is backtracking on its approach to determining whether certain crypto transactions fall within the SEC’s laws. SEC enforcement head turned commentator John Reed Stark regards this as a signal that the SEC’s crypto enforcement is weakening.
Binance and Coinbase Cases on Hold
The SEC’s case against Binance is also being delayed by two months following a mutual request by the two parties. The regulator cited the dynamic nature of its environment of regulation as a key driver of the delay.
A similar move was undertaken by the SEC with respect to the case of Coinbase, requesting time to respond to the issue of whether the SEC can regulate the company’s activity as a security. These delays are a symptom of a greater overall realignment that might have been triggered by the SEC’s anticipated change of leadership.
Shifts in SEC Leadership and Internal Changes
There is growing speculation that Paul Atkins, a former SEC commissioner, could be made head of the agency within a potential Trump administration. His appointment could presage a sudden change of pace away from the past enforcement-driven approach of the agency to crypto if confirmed.
Meanwhile, the SEC’s Crypto Assets and Cyber Unit was also reportedly renamed the Cyber and Emerging Technologies Unit. The renaming is a signal that the regulator is taking a step back regarding crypto-related enforcement, perhaps downplaying the priority of potential future actions.
Conclusion
The SEC’s recent actions indicate a significant change of direction with regards to crypto regulation. Suspending large lawsuits, the creation of a Crypto Task Force, and internal restructuring all indicate a time of rethinking. It is unknown if this will lead to a friendlier landscape of regulation of crypto companies or merely a temporary slowdown.
Related Reading: Montana Moves Closer to Holding Bitcoin Reserves Amid Growing State-Level Crypto Adoption
