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 is reportedly starting to scale back its 50-staff crypto enforcement unit.
Some of the lawyers in the crypto unit will be assigned to other departments in the agency, The New York Times reported on Feb. 4, citing five people with knowledge of the matter.
One of the crypto unit’s top lawyers was also moved from the SEC’s enforcement arm, which some complained was an unfair demotion, according to the sources.
An SEC spokesperson declined Cointelegraph’s request for comment.
The report comes just hours after SEC Commissioner Hester Peirce outlined the regulator’s new approach to regulating the crypto markets, including evaluating the security status of crypto assets and potentially providing “retroactive relief” for certain token offerings.
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Peirce likened the SEC’s old approach as “careening” down the road while incessantly slamming on the enforcement breaks.
“The crypto road trip on which the newly announced Crypto Task Force has embarked likewise should be more enjoyable and less risky than the crypto road trip the Commission has taken the industry on for the last decade,” she said.
The SEC brought 33 cryptocurrency-related enforcement actions against 90 defendants and respondents in 2024, according to Cornerstone Research.
Related: SEC acting chair onboards ex-Coin Center director to crypto task force
Recent reported changes to the SEC’s crypto enforcement unit follow a larger leadership shakeup at the agency over the past few months, which has accelerated since President Donald Trump entered office on Jan. 20.
In October 2024, the SEC announced its chief enforcement officer, Gubir Grewal, stepped down, prompting speculation that the SEC could be taking a softer approach to crypto.
As the SEC’s chief enforcer, Grewal recommended more than 100 enforcement actions “addressing widespread noncompliance in the quickly growing crypto space, including against the operators of the largest crypto asset trading platforms in the world,” the regulator said.
Sanjay Wadhwa, the enforcement division’s deputy director, was then promoted to serve as acting director but stepped down from the agency just months later on Jan. 31 after more than 21 years with the commission.
Former SEC Chair Gary Gensler resigned from the agency on Jan. 20.
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