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 (SEC) is reportedly reducing the size of its crypto enforcement unit, which currently consists of 50 staff members. According to five individuals familiar with the matter, some of the lawyers from the crypto unit will be reassigned to other departments within the agency. The New York Times reported this development on Feb. 4.
In addition, one of the top lawyers from the crypto unit was transferred from the SEC’s enforcement arm, a move that some sources view as an unfair demotion.
When approached for comment, an SEC spokesperson declined Cointelegraph’s request.
This report comes shortly after SEC Commissioner Hester Peirce outlined the regulator’s new approach to overseeing the crypto markets. This includes evaluating the security status of crypto assets and potentially providing “retroactive relief” for certain token offerings.
Peirce described the SEC’s previous approach as recklessly applying enforcement measures. She compared the agency’s new approach to a more enjoyable and less risky road trip for the crypto industry.
According to Cornerstone Research, in 2024, the SEC initiated 33 enforcement actions related to cryptocurrencies, targeting 90 defendants and respondents.
The recent changes to the SEC’s crypto enforcement unit are part of a broader leadership reorganization at the agency, which has been taking place over the past few months and has gained momentum since President Donald Trump took office on Jan. 20.
In October 2024, the SEC announced the departure of its chief enforcement officer, Gubir Grewal, leading to speculation that the agency might adopt a more lenient stance towards cryptocurrencies. As the chief enforcer, Grewal had recommended over 100 enforcement actions to address noncompliance in the rapidly growing crypto space, including actions against the operators of the world’s largest crypto asset trading platforms, according to the regulator.
Sanjay Wadhwa, the deputy director of the enforcement division, was then promoted to acting director. However, he resigned from the agency just a few months later on Jan. 31, after serving the commission for over 21 years.
Former SEC Chair Gary Gensler also resigned from the agency on Jan. 20.