At the SEC Speaks event on May 19, 2025, Commissioner Caroline Crenshaw, the only Democratic member of the U.S. Securities and Exchange Commission, expressed her concerns about how the agency is handling cryptocurrency rules under the Trump administration.
She compared the SEC’s approach to a game of Jenga, where removing important rules is like pulling out key blocks. She also stated that such an action is a risk and can collapse the entire system.
According to her, removing critical regulations could destabilize the crypto market and could cause bigger problems. She has stated that the SEC is removing important rules without proper thought or public discussion, especially for crypto.
As per the reports, she further stated that instead of maintaining the rules, the agency uses informal guidance to quietly change how things are regulated, which she calls “regulation by non-enforcement.”
Commissioner Caroline Crenshaw pointed to the 2022 FTX collapse as an example and stated that it could go wrong if the crypto market is not closely watched. She believes that as cryptocurrencies mix more with traditional finance, the SEC needs stronger rules to prevent these big problems.
On the other hand, Republican SEC commissioners, like Chair Paul Atkins, think the agency has been too strict. According to Atkins, the overly tight regulations of the SEC have hindered the progress of crypto. He argues that the SEC should loosen up its rules to allow crypto companies to innovate without restriction.
Commissioner Hester Peirce, head of the SEC’s Crypto Task Force, has criticized the Biden-era approach for evading sound regulatory practices, asserting that most crypto assets are not securities and are no longer traded as such.
Commissioner Mark Uyeda believes that the SEC should stop using its authority to regulate crypto assets as securities. The government should take enforcement actions, such as lawsuits, to regulate cryptocurrencies.
As per Udeya, instead of all this, the SEC should create clear, straightforward, and exact rules. On the other hand, Commissioner Caroline Crenshaw is concerned that the SEC is becoming too flexible and does not closely monitor the crypto market.
She warns that ignoring the challenges faced by cryptocurrencies could lead to failures similar to those experienced in the past. However, Republican commissioners, including Uyeda, think this shift toward lighter regulation is a beneficial move to encourage crypto creativity.
This difference of opinion from all leaders shows a major split within the SEC. Some want the SEC to have stricter regulations, and others want more flexibility to support the growing crypto industry.
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