The Securities and Exchange Commission’s (SEC) aggressive regulatory approach towards the cryptocurrency industry is expected to come to an abrupt end following Donald Trump’s presidential election victory, according to John Reed Stark, former head of the SEC’s Office of Internet Enforcement.
Stark is known for his hostile attitude towards the cryptocurrency market.
According to Stark, Only Very Serious Fraud Cases and Existing Cases Will Continue
Speaking during an X Spaces event on Thursday, Stark declared the SEC’s “war on crypto” over, anticipating a significant shift in regulatory enforcement under a Trump administration. “The SEC is not going to be bringing any fraud cases against cryptoverse participants at all in the coming years,” Stark stated, suggesting a dramatic departure from the current regulatory climate.
Under current SEC Chair Gary Gensler, the cryptocurrency industry has faced intense scrutiny, with enforcement actions brought against major players like Consensys, Coinbase, and Kraken. Investigations have also targeted companies such as Immutable and OpenSea. Gensler’s stance, asserting that crypto assets should be regulated similarly to traditional securities under existing federal laws, has drawn criticism even from within the Democratic party. Representative Ritchie Torres (D-NY) publicly challenged Gensler’s interpretation of securities laws, arguing against the categorization of NFTs and other cryptocurrencies alongside stocks and bonds.
Stark predicts that most ongoing SEC cases, barring those involving “egregious fraud,” will likely come to a halt. He anticipates the SEC will focus on finalizing settlements already ruled upon by judges. Regarding Gensler’s future, Stark believes he will likely resign before Trump’s inauguration, preempting a potential dismissal. While Trump has vowed to fire Gensler, Stark suggests this may be unnecessary, as Trump could appoint a current Republican commissioner as acting chair, effectively demoting Gensler.
The two Republican SEC Commissioners, Hester Peirce and Mark Uyeda, are considered potential successors. Peirce, known in the crypto community as “Crypto Mom,” is reportedly not interested in leading the SEC beyond her current term, which expires next year. Uyeda has been a vocal critic of the SEC’s current crypto strategy, labeling it a “disaster for the whole industry.”
Other potential candidates for the SEC chair include Dan Gallagher, Robinhood’s chief legal officer and former SEC commissioner; Paul Atkins, another former SEC commissioner; and Chris Giancarlo, former head of the Commodity Futures Trading Commission.
