The 'Crypto Mom' and the new leadership of the Securities and Exchange Commission have begun to change the regulator's approach to the digital asset sector.
The Securities and Exchange Commission (SEC) of the United States plans to shrink its division dedicated to cryptocurrencies and establish a new approach to regulating digital assets. Henceforth, the regulator will only be able to launch formal investigations into companies after approval from Donald Trump's administration.
According to sources close to the situation cited by the New York Times, the SEC's special unit of more than 50 lawyers and employees involved in cryptocurrency enforcement will be downsized. Some lawyers will be transferred to other departments, while others consider this decision an unfair demotion.
It is reported that one of President Trump's first executive orders was aimed at stimulating the growth of cryptocurrencies and "eliminating over-regulation of digital assets". These cuts represent one of the first concrete steps to reduce regulators' pressure on the crypto market.
SEC Lawyers Now Need Presidential Approval for Investigations
In a further step in the same direction, SEC lawyers have been told that they will need to obtain permission from the presidential administration to investigate market participants. Normally, the SEC is overseen by a five-member commission, including the chairman, appointed by the White House.
Currently, the commission consists of three members, all appointed by the president. According to the publication's sources, some SEC employees have been told that they will have to obtain the commission's approval for any formal investigative orders necessary to issue subpoenas or produce documents.
In late January, SEC Acting Chairman Mark Uyeda announced the creation of a working group to develop transparent rules on cryptocurrency regulation (Crypto Task Force). Commissioner Hester Peirce, known for her support of crypto innovations and nicknamed 'Crypto Mom' for her efforts in creating sensible regulation of the market, was appointed to head the group.
On 4 February, Hester Peirce published an article on the SEC's website titled The Journey Begins, outlining ten priority areas for the SEC's new cryptocurrency task force. These include defining the boundaries between digital assets such as securities and commodities, creating a 'workable' path for the registration of crypto companies, clarifying the status of staking and crypto lending, as well as outlining the responsibilities of the SEC and other regulators.
On the same day, the 'crypto czar' David Sacks held a press conference where he and several members of Congress outlined their priorities for cryptocurrency regulation. The legislators' first initiative will be to examine a stablecoin law, while Sacks, 'at Trump's request', intends to study the possibility of creating Bitcoin reserves for the US.
Frequently asked questions
What is the US SEC?
The SEC (Securities and Exchange Commission) is the US federal authority that oversees financial markets and securities. It is supervised by a five-member commission, with the chair appointed by the White House, and in recent years it has also handled the regulation of digital assets.
What did the SEC decide on crypto regulation in early 2025?
In February 2025 the SEC scaled back its cryptocurrency unit — more than 50 lawyers and staff members according to the New York Times — transferring part of the personnel to other departments. It was one of the first concrete steps to reduce regulatory pressure on the crypto market after Trump's executive order against the "excessive regulation of digital assets".
Who led the SEC's Crypto Task Force and with what goals?
Commissioner Hester Peirce, nicknamed "Crypto Mom" for her support of crypto innovation, was appointed to head the Crypto Task Force created at the end of January 2025 by acting chairman Mark Uyeda. On February 4, 2025 she outlined ten priority areas, including the boundaries between digital assets as securities or commodities, a workable registration path for crypto companies and clarification of the status of staking and crypto lending.
Why did SEC lawyers need approval to open investigations?
According to the sources cited by the New York Times, SEC employees were told that any formal order of investigation — required to issue subpoenas or request documents — would need the commission's approval, in line with the Trump administration's new direction of easing oversight of the crypto market.
