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.
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.
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.
Both commissioners share a strong connection with Paul Atkins, Trump’s nominee for SEC Chair, who is also known for his crypto-friendly outlook.
Industry participants have long called for clearer regulations, arguing that many cryptocurrencies function more like commodities than securities.
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.
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.
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.
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.
This guidance was designed to enhance transparency and mitigate risks associated with safeguarding digital assets.