The SEC moves towards traditional enforcement as leadership changes direction

The Securities and Exchange Commission (SEC) has begun restructuring its enforcement priorities under new leadership, focusing on traditional violations and easing its stance towards emerging sectors such as cryptocurrencies.

Acting Executive Director Sam Waldon said agents are re-adjusting their approach to focusing on insider trading, accounting fraud and fraud that directly affect individuals, including schemes targeting seniors. These statements came at a gathering in the securities industry as the committee coordinates its stance under a new Republican-led administration.

The SEC is moving away from new legal theory

In recent years, Reuters reports that the SEC has expanded its enforcement strategy to include cases based on unconventional legal interpretations. Notable examples include the 2021 “Shadow Trading” incident.

However, Waldon showed that the agency would reduce its reliance on such strategies. He explained that current leadership prefers simple enforcement rooted in an established legal framework.

Waldon noted that there is creativity when choices become less of a priority. Instead, the focus will return to more familiar areas such as corporate disclosure fraud and violations of the Insider Transaction Act. This shift shows a significant shift from previous efforts to experiment with expanding the SEC reach into new legal realms.

Leadership changes swift policy revisions

Since January, the SEC has undergone structural and personnel changes. Following the appointment of former Trump administration official Paul Atkins, the agency has begun overhauling several regulatory procedures.

Among these changes is a rollback of authority that allows executive staff to begin investigations without prior committee approval. Waldon has addressed this procedural adjustment and shows it is too early to determine its full impact. However, he acknowledged that the committee is already investigating alternative processes to streamline approval while maintaining control.

The change in leadership is also consistent with the transition of key staff within the committee’s executive force. This revenue follows criticism of the SEC’s previous direction, suggesting a broader organizational shift towards conservative regulatory methods.

Focus returns to individual accountability

Waldon emphasized that the committee intends to update its focus on holding individuals accountable for violations. He said personal accountability has always been a priority, but now it will be more focused under the current administration. Waldon says these cases will be better coordinated with the Commission’s new outlook and likely to receive more favorable considerations.

This new focus comes amid a wider effort to restore public confidence in financial regulations by addressing fraud that directly affects retail participants. Waldon has repeatedly targeted actions that affect individual investors, including fraudulent conduct targeting seniors.

Cryptocurrency surveillance will be coordinated as the task force engages stakeholders

In parallel with this change in enforcement priorities, the SEC’s approach to cryptocurrency has also undergone a major change. In a report by the Market Screener, the committee recently convened a public roundtable through the Crypto Task Force to assess how existing securities laws apply to digital assets. The session involved former SEC officials, legal experts and industry representatives, including Miles Jennings of A16Z Crypto.

Republican Prime Minister Hester Perth, who leads the task force, said the committee is entering a new phase of crypto surveillance. According to Peirce, the Round Table has launched a revised regulatory approach to digital tokens and blockchain-based systems.

Participants discussed whether cryptocurrencies should be governed under the same legal standards as those applied to traditional securities. Some contributors supported the adoption of a “technology-neutral” approach, while others warned against creating separate rules for digital tokens.

The industry calls for clarity of existing legal standards

During the roundtable, the legal advisor representing A16Z Crypto argued that the differences between decentralized networks and corporate entities require clear regulatory treatment. Jennings said blockchain systems like Ethereum differ in functionality from shareholder-based models and should not be evaluated through the same lens as stock securities.

This perspective has been reflected by several stakeholders over the past few months, and has increased considerably as enforcement cases under the previous administration increased. In the Biden era, several digital asset platforms, including Coinbase and Kraken, face legal action that allegedly operate outside of current securities regulations. These actions were subsequently suspended or withdrawn under new leadership.

Some SEC officials have expressed concern despite industry support for the revised regulatory path. Democrat Commissioner Caroline Crenshaw noted that changing existing laws to accommodate certain technologies could undermine the protections of those laws. She also warned against the broader implications of such movements in other parts of the market regulated by the same framework.

Crenshaw’s remarks highlighted tensions within the committee about how far crypto regulations should be from existing legal structures. While some members advocate for modernization, others warn that such changes could undermine the integrity of the overall enforcement environment.

Regulation overhaul supported by executive action

The SEC change coincides with President Donald Trump’s broader initiative since taking office. Earlier this month, the president signed an executive order to establish a national cryptocurrency reserve. He also hosted industry leaders at the White House Summit, focusing on blockchain innovation and future policy directions.

These developments reflect the administration’s plans to revamp how digital assets are governed in the United States, according to officials familiar with the issue, and the executive order forms part of a long-term strategy to reduce regulatory uncertainty for blockchain-based companies.

As the SEC proceeds with the transition, Paul Atkins is expected to appear before Capitol Hill lawmakers. His testimony is expected to outline the agency’s current priorities and continued reorganization. Observers expect Atkins to see that enforcement will concentrate on traditional cases that involve market manipulation and fraudulent disclosure.

The agency’s updated agenda shows a decisive return to traditional enforcement, which has less emphasis on expanding legal interpretations into unknown territory. While Crypto continues to be part of the SEC’s monitoring portfolio, the new approach supports gradual adjustments rather than wiping away regulatory experiments.