- The SEC is relaxing crypto rules.
- That’s dangerous, says Commissioner Caroline Crenshaw.
Relaxing crypto rules jeopardises not Wall Street, but Main Street Americans.
On Monday, Caroline Crenshaw, the sole Democrat commissioner at the Securities and Exchange Commission, issued that stark warning at the SEC Speaks conference.
Crenshaw said the agency’s ambition to ease off on regulations of and enforcement actions against crypto companies is tantamount to the rules-chopping period that preceded the 2008 financial crisis.
“It almost feels like we’re playing a game of regulatory Jenga,” she said, warning that the “carefully constructed tower of regulatory blocks will tumble” and open the door “to the same types of misconduct that we have spent decades eradicating.”
“When that happens, small businesses and retail investors are the ones who will lose out,” Crenshaw said.
Her comments marked a sharp contrast to new SEC chair Paul Atkins’ conference speech on Monday, in which he celebrated the agency’s recent regulatory relaxation of crypto rules as a way to boost innovation.
“It is a new day at the SEC,” Atkins said.
The schism between the two highlights a regulatory environment in flux. US President Donald Trump touted a pro-industry platform, promising to end the Biden era’s crypto crackdown. In office, he has fired off a barrage of executive orders to that effect.
‘A dangerous game’
The SEC is at the heart of that push. Under former chair Gary Gensler, the markets watchdog pursued many crypto companies, accusing them of breaking securities laws.
Things have changed since the November election. Gensler has quit and the SEC halted its cases against firms like Ripple, Coinbase, Robinhood, and Kraken, to mention a few.
The regulator has also established a dedicated Crypto Task Force to create industry-friendly policies, and cut the number of lawyers working on crypto enforcement cases.
“This is a dangerous game,” Crenshaw said on Monday.
She’s in the minority. Republican commissioners Mark Uyeda and Hester Peirce both followed Atkins’ lead and swooned over the SEC’s pivot.
Who is Paul Atkins?
Atkins himself is expected to drive home Trump’s plans for laissez faire financial regulations.
He is a decades-long supporter of both the digital asset industry and of financial deregulation.
So much so that, ahead of his March confirmation hearing, Democrat Elizabeth Warren wrote a letter that accused him of having “contributed to the near collapse of the banking and financial system in 2007 and 2008.”
In recent years, he repeatedly urged the government to tear up the Dodd-Frank Act, which Congress passed in 2010 to prevent another financial crash at the expense of taxpayers.
It is against this backdrop that Crenshaw voiced her dissent.
“I hope to be a voice of common sense during this race to deregulate,” Crenshaw said in a recent interview.
Crypto market movers
- Bitcoin is up 2.3% over the past 24 hours to trade at $105,283.
- Ethereum is up 4% to trade at $2,514.
What we’re reading
- Stablecoin bill clears Senate hurdle by winning over Democrats ― DL News
- Stablecoin Bill Passes Key Hurdle: Dems Join GOP To Deliver a Crypto Win ― Unchained
- US DOJ opens investigation into Coinbase’s recent cyberattack — Reuters
- This is a wake-up call (not a crisis) — Milk Road
- Why this short seller is betting against Michael Saylor to buy more Bitcoin― DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
