SEC Commissioner Crenshaw Criticizes Agency's Approach to Crypto Regulation
According to Cointelegraph, SEC Commissioner Caroline Crenshaw, who is anticipated to leave the agency within a month, utilized one of her final public speaking opportunities to critique the regulator's handling of digital assets. During a Brookings Institution event on Thursday, Crenshaw expressed concerns over the SEC's standards, claiming they had "eroded" over the past year. She described the markets as resembling "casinos" and highlighted "chaos" due to the agency's dismissal of long-standing enforcement cases, reduction in civil penalties, and fewer overall actions.
Crenshaw, whose term officially ended in June 2024, is expected to depart in January. She criticized both crypto users and the agency's response to the evolving markets. "People invest in crypto because they see some others getting rich overnight," Crenshaw remarked, noting the less visible stories of significant losses. She questioned the basis of cryptocurrency prices, suggesting that many purchasers are not trading based on economic fundamentals. Crenshaw speculated that crypto purchasers are driven by speculation, hysteria from promoters, and a desire to gamble, among other factors.
In contrast, SEC Chair Paul Atkins, Commissioner Hester Peirce, and Commissioner Mark Uyeda have publicly supported the agency's approach to digital assets and the Trump administration's policy direction. Peirce and Atkins participated in a Blockchain Association Policy Summit this week, discussing crypto regulation and potential market structure changes under Senate consideration.
During the event's question-and-answer session, Crenshaw elaborated on her views, describing crypto as a "tiny piece of the market" and suggesting the SEC focus on other regulatory concerns. She expressed apprehension about the agency potentially granting crypto companies exceptions from policies applicable to traditional finance. Crenshaw warned that loosening securities laws could lead to significant market contagion.
The departure of Crenshaw would leave the SEC with three Republican commissioners, two nominated by U.S. President Donald Trump. As of Thursday, Trump had not announced plans to nominate another Democrat to the SEC, and Crenshaw noted a 20% reduction in the agency's staff over the past year. The Commodity Futures Trading Commission also faces leadership challenges, with many commissioners expected to leave by 2025. Acting Chair Caroline Pham remains the sole CFTC commissioner and a Republican, while the U.S. Senate is anticipated to vote on Trump's nominee, Michael Selig, to chair the agency after Pham.