SEC’s Crypto Enforcement Era Fades Amid Strategic Shift

Former SEC official John Reed Stark has declared the agency’s crypto enforcement era effectively over, citing major internal shifts under the current administration. “Stick a fork in SEC crypto-enforcement, it’s done,” Stark posted on social media, highlighting the agency’s move away from crypto-specific crackdowns.

The SEC has recently rebranded its “Crypto Assets and Cyber Unit” to the “Cyber and Emerging Technologies Unit,” signaling a broader enforcement scope beyond cryptocurrencies. Laura D’Allaird, the unit’s new head, confirmed the strategic pivot, noting the agency’s enforcement now spans a wider range of emerging technologies, including artificial intelligence and blockchain misuse.

D’Allaird emphasized a three-pronged approach, with the first priority being fraud prevention involving new technologies. This includes targeting individuals who exploit the hype around blockchain and crypto to deceive investors. The second focus is cybersecurity compliance, cracking down on misconduct such as social engineering and activity on the dark web. The third bucket involves identifying schemes that repackage traditional fraud in modern tech jargon—what she terms “old wine in a new bottle.”

The shift comes as the SEC drops several high-profile crypto cases, including those involving Coinbase and Ripple. In a related move, the agency’s lead crypto litigator Jorge Tenreiro was recently demoted, reinforcing speculation of a de-escalation in crypto-specific actions.

While D’Allaird insists the SEC remains committed to investor protection and adapting to innovation, the recent restructuring suggests that aggressive crypto enforcement is no longer a central priority. This change reflects a broader regulatory recalibration as Washington reevaluates its stance on digital assets.