SEC’s New Rules: Will Crypto Firms Face Fewer Crackdowns Now?

In what could be the most eventful week in crypto history, we’ve seen many ups and downs, policy changes, and even a trade war brewing.

Among the biggest headlines, the U.S. SEC has introduced a major shift in its approach to regulation, and it could change everything for the crypto industry. With new rules requiring staff to seek approval from top officials before launching investigations, this change comes after Gary Gensler’s departure and Mark Uyeda stepping in as Acting Chair.

So, what does this mean for crypto companies and investors, and how might it affect ongoing cases, like the Ripple vs. SEC case? Let’s take a closer look.

Changes to SEC Enforcement Process

Under the old system, SEC enforcement staff could start investigations on their own. But with the new rules, they must now seek approval from politically appointed commissioners before issuing subpoenas or compelling testimony. This change comes after Gensler’s departure, who had led an aggressive crackdown on crypto firms accused of violating securities laws.

With Uyeda, Hester Peirce, and Caroline Crenshaw now leading the SEC, it’s possible that the agency’s approach to crypto enforcement will shift.

Step Toward Fairness or Delay in Action?

NFT analyst Tyler Warner believes this new rule is necessary to prevent “rogue attacks.” He argues that it ensures investigations are based on solid evidence and not personal or political motivations.

However, retired SEC attorney Marc Fagel disagrees. He warns that this new approval process could slow down enforcement, allowing fraudsters more time to take advantage of regulatory delays.

At the same time, many in the industry see this change as a positive one, bringing innovation and technology back into the space that has sometimes been hurt by rapid and unpredictable regulations.

What It Means for Crypto Users

For crypto investors and companies, this change could reduce the chances of sudden, unexpected regulatory actions. Under Gensler, the SEC was aggressive in going after crypto projects, claiming they were unregistered securities. Critics said this approach caused uncertainty and slowed down innovation. With investigations now requiring approval from top officials, crypto firms may have more room to breathe, and enforcement could become more predictable.

However, the real effect will depend on how the new SEC leadership handles this change. If the approval process slows down investigations, crypto companies might face fewer legal challenges, which could make for a more favorable environment for growth. But, if the process is too lenient, it could lead to more scams and fraud, damaging investor trust.

For now, the industry will be watching closely to see how Uyeda and his team handle upcoming cases.