Representative Stephen Lynch warned that the Securities and Exchange Commission under the Trump administration has moved away from active oversight of crypto, citing dismantled teams and dropped enforcement actions. Speaking at a House Financial Services Committee subcommittee hearing on digital assets, fintech and AI, Lynch said he supports innovative technology but questioned “recent regulatory developments” in the United States.
“Under the Trump administration […] the SEC has dismantled several of the teams that are responsible for managing the incidents of scams and frauds, the White House has dismantled FinHub, which is the dedicated office that built the agency’s technical expertise on digital assets and fintech,” Lynch said, adding: “Related to crypto, there’s no cop on the beat. The SEC has dropped most of the cases that they’ve had against firms that had been charged with misconduct.”
Lynch pointed to prosecutions and investigations that were dropped or altered involving crypto firms such as Ripple Labs and Coinbase, noting that some executives have close ties to the administration. President Trump nominated Paul Atkins to chair the SEC after Gary Gensler’s departure in January 2025.
Subcommittee chair Representative Bryan Steil raised separate concerns about whether regulators are “prepared to meet the moment” as technologies like digital assets evolve, and said Congress must provide clarity to eliminate regulatory fragmentation and uncertainty. He alluded to a market structure bill moving through the Senate that could reshape oversight.
Regulators are taking some steps to coordinate oversight in the absence of comprehensive market structure legislation. Earlier in March, the SEC and Commodity Futures Trading Commission signed a memorandum of understanding to coordinate oversight of financial markets, including digital assets. Shortly after, the SEC issued an interpretative notice outlining how it intends to treat crypto assets under federal securities laws.
SEC Chair Paul Atkins described the commission’s approach as a “bridge” intended to clarify crypto regulation while Congress stalls on the CLARITY Act, proposed legislation expected to give the CFTC more explicit authority over certain cryptocurrencies.
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