SEC commissioners say agency may move away from enforcement actions

Starting next year, the SEC will operate with a smaller team of commissioners while we wait for the Senate to approve President-elect Donald Trump’s nominees.

SEC Commissioners Hester Peirce and Mark Uyeda, both Republicans, are the only sitting commissioners who will remain with the agency after Inauguration Day. After SEC Chair Gary Gensler departs, how the agency approaches the crypto industry should see a big shift, according to Peirce.

“We have a big toolkit,” Peirce said earlier this month during an appearance at the Blockchain Association Policy Summit.

“We’ve always gravitated toward enforcement in this area as our tool of choice,” she added. “I think when you see new commission changes and the composition changes, then the mix of cases can change as well.”

The nature of federal agencies means that some — or most, in the SEC’s case — policy discussions happen behind closed doors, Uyeda added.

“That’s why we have the Administrative Procedure Act, to allow the public to comment on regulation,” he said. “That’s our accountability for the American public to provide that transparency.”

In cases where agency staff issue guidance that differs from SEC rules (for example SAB 121), there is no public comment period.

In the case of SAB 121, both chambers of Congress elected to overturn the policy, which states that digital asset custodians should report a liability and “corresponding assets” on their balance sheets. President Biden ultimately vetoed the resolution, however.

Uyeda looks forward to the agency providing more opportunities for public input.

“Writing the shift is hard because we are pretty far down this road,” Peirce said.

Addressing the crypto industry directly, she added, “this is going to require a lot of hard work from us and from you to get back on the right foot, but I think we can do it.”