Having served as the first chief of the SEC’s crypto unit from 2017 to 2019, I’m often asked what kind of crypto enforcement we should expect to see from the new administration. My first answer is that I do not know. My second answer is that I believe it will be different, but it will not disappear.
To anticipate the future of crypto enforcement, we should begin by reviewing the past.
The beginning
The SEC’s crypto enforcement unit was formed in 2017 during the first Trump Administration. The early focus was on one, fraud, and two, core capital raising events. Regulation of capital raising is the principal purpose of the Securities Act of 1933. When an investor gives money to an entrepreneur who will use it in a business to generate profit, the investor is entitled to certain information about the business. Early crypto investigations were focused on this fundraising activity, which was usually in the form of an unregistered…
