The U.S. Securities and Exchange Commission (SEC) has signaled plans to reassess its cryptocurrency policies as President-elect Donald Trump prepares to take office next week, according to a Wednesday report by Reuters.
SEC Republican commissioners Hester Peirce and Mark Uyeda are likely to introduce changes to how cryptocurrencies are classified and regulated.
This shift may lead to updates in the agency’s approach to the crypto industry, potentially rolling back some of the strict enforcement actions taken under outgoing SEC Chair Gary Gensler.
Potential Policy Shifts Under New SEC Leadership
According to Reuters, Peirce and Uyeda are expected to review a range of cryptocurrency-related enforcement actions and clarify when digital assets should be considered securities.
Under Gensler’s leadership, the SEC brought 83 crypto-related enforcement actions targeting companies like Coinbase and Kraken, often arguing that many tokens operate as securities and must comply with SEC regulations.
Peirce and Uyeda, who are known as crypto advocates, have criticized Gensler’s stringent stance.
Starting next week, they will hold a majority among the SEC’s politically appointed commissioners and are expected to reevaluate pending enforcement actions, potentially freezing or withdrawing cases that do not involve allegations of fraud.
Industry participants have long called for clearer regulations, arguing that many cryptocurrencies function more like commodities than securities.
Both commissioners share a strong connection with Paul Atkins, Trump’s nominee for SEC Chair, who is also known for his crypto-friendly outlook.
Atkins’ confirmation by the Senate remains pending, but his influence is already evident in Peirce and Uyeda’s anticipated policy direction.
While enforcement reviews dominate the immediate agenda, addressing regulatory hurdles is also a priority for the incoming administration.
Rescinding SAB No. 121: Potential Relief for Public Companies
Another focus of the SEC under the new administration is the potential rescission of Staff Accounting Bulletin (SAB) No. 121, which has substantially increased costs for public companies holding cryptocurrencies on behalf of third parties.
Issued in March 2022, SAB No. 121 requires companies to record digital assets held for customers as liabilities on their balance sheets, with corresponding assets of the same amount.
This guidance was designed to enhance transparency and mitigate risks associated with safeguarding digital assets.
However, it has faced criticism for deterring companies from offering crypto custody services due to increased regulatory burdens.
Rescinding SAB No. 121 could reduce operational costs for public companies, potentially encouraging more firms to enter the crypto custody market.
At the same time, concerns remain about whether sufficient safeguards will exist to protect investors and the broader financial system.
The commissioners may seek public and industry feedback as part of the process of drafting new rules, but finalizing comprehensive regulations is expected to take months or longer.
In addition to revisiting SAB No. 121, the Trump administration has indicated plans to prioritize executive orders addressing issues such as crypto de-banking.
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