The crypto industry recently faced intense scrutiny from the SEC but ultimately emerged victorious. Now, key figures in the crypto world are turning their attention to the regulator, pushing back in various ways.
With the political landscape shifting after Donald Trump’s election, partly due to substantial financial backing from the crypto sector, industry leaders are flexing their newfound influence. They are calling for accountability from the regulator and even seeking retribution for past regulatory actions.
Ripple’s legal chief, Stuart Alderoty, and Coinbase CEO Brian Armstrong are encouraging firms to steer clear of law offices that hire former SEC employees involved in the crackdown. This effort has created uncertainty for those departing the agency.
Meanwhile, Coinbase has requested details on the SEC’s spending during investigations under Gary Gensler, the former SEC Chair. Additionally, Tyler and Cameron Winklevoss, the billionaire founders of Gemini and staunch Trump supporters, are demanding that investigators responsible for their case be dismissed and publicly named.
These efforts may bolster legislative attempts to redefine the SEC’s jurisdiction over cryptocurrency, a key issue for lawmakers this year.
The backlash reflects a broader shift in how federal agencies are treated, with increased scrutiny and accusations of bias becoming more common. Across multiple government departments, including the DOJ, agency officials are facing growing criticism.
The Trump administration has embraced cost-cutting measures that have already led to significant layoffs, making regulators more vulnerable to industries with political allies in leadership positions.
For crypto firms, this shift offers a rare chance to reshape their historically fraught relationship with the regulator. The agency, now led by acting Chair Mark Uyeda, is expected to be more receptive to the industry’s concerns. However, it remains the primary regulator for most of the sector, and firms still need its approval for new products or public listings.
Longtime SEC employees have expressed concern for agency staff amid these pressures. Commissioners Caroline Crenshaw and Hester Peirce have defended their employees, emphasizing that they act under the direction of the agency’s leadership. Some staff members are already feeling the effects. A former employee, speaking anonymously, reported instances where law firms declined to interview or hire agency staff because of their past involvement in crypto enforcement.
Despite industry pushback, not all criticisms target individual SEC staffers. Some crypto leaders are focused on preventing future enforcement actions they view as excessive. The agency, under Uyeda’s leadership, has already suspended or dropped at least ten cases against firms like Gemini, Coinbase, and Robinhood, while working on new regulatory frameworks. Uyeda is holding the position until Trump’s nominee, Paul Atkins, takes over.
Still, many in the crypto industry remain frustrated by previous legal battles. Former House assistant and legal professor J.W. Verret noted that companies spent millions defending themselves, only to have their cases dismissed within weeks. Lawmakers continue to review the SEC’s actions but have yet to determine whether agency staff involved in past enforcement should face consequences.
Nonetheless, others argue that the outcry is unnecessary. A former SEC commissioner, speaking anonymously, pointed out that the agency is already scaling back enforcement and drafting clearer crypto regulations. The official dismissed the backlash as opportunistic, calling it “grave dancing.”
This sentiment may be shared by industry players like BitFuFu Inc. (NASDAQ: FUFU) that are more interested in seeing the concrete steps being made to have clear regulations for the industry rather than spending time and resources dwelling on the past.
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