By Hannah Lang and Chris Prentice

Washington – Potential SEC Overhaul on Cryptocurrency Policies

Top Republican officials at the U.S. Securities and Exchange Commission (SEC) are preparing to revamp cryptocurrency regulations, potentially beginning next week with the inauguration of President-elect Donald Trump, according to sources familiar with the matter.

Key Changes Under Consideration

Commissioners Hester Peirce and Mark Uyeda are considering:
– Initiating the process to create guidance on when cryptocurrencies are classified as securities.
– Reviewing ongoing crypto enforcement cases.

Paul Atkins, Trump’s crypto-friendly nominee for SEC chair and former SEC commissioner, is expected to reverse the stringent cryptocurrency regulations implemented by President Biden’s SEC chair, Gary Gensler, who will resign on January 20.

Majority Shift in SEC Leadership

Peirce and Uyeda will gain a majority among politically-appointed commissioners and will likely start the reform process before Atkins is confirmed. Both commissioners, being crypto advocates, have challenged Gensler’s strict regulatory approach and have discussed alternative crypto-positive initiatives with Atkins, with whom they share a strong professional relationship.

Re-evaluation of Enforcement Actions

Gensler’s SEC initiated at least 83 crypto-related enforcement actions against prominent firms such as Coinbase and Kraken. The SEC posited that many crypto tokens function like securities, necessitating compliance with SEC regulations. However, some companies contend that cryptocurrencies resemble commodities more closely and call for clearer rules. The new SEC leadership is anticipated to begin reviewing current court cases and might halt litigation lacking fraud claims, potentially leading to some cases being withdrawn.

Future Developments

Trump is expected to issue executive orders promoting reviews of crypto policies, further igniting enthusiasm in the crypto market, as seen with Bitcoin surpassing $100,000 in December.

Despite a head start, reaching consensus on crypto regulations may take months, and settling existing enforcement actions could be complex and politically sensitive. New SEC leadership might continue to pursue accountability for fraud in the industry, as suggested by experts.

(Additional reporting and writing by Michelle Price; Editing by Nick Zieminski)