Representative Stephen Lynch told a House Financial Services subcommittee that the Securities and Exchange Commission has pulled back from active oversight of digital assets under the current administration. Speaking at a hearing on digital assets, fintech and artificial intelligence, Lynch said he supports innovation but warned that recent regulatory moves have weakened enforcement against crypto scams and fraud.
Lynch said the SEC has dismantled teams that once handled incidents of scams and fraud and noted the White House shuttered FinHub, the office that developed the agency’s technical expertise on digital assets and fintech. He added that, in his view, “related to crypto, there’s no cop on the beat,” arguing that the agency has dropped or scaled back many cases against firms accused of misconduct.
He pointed to high-profile examples where prosecutions or enforcement actions were dropped or altered, including matters involving Ripple Labs and Coinbase, and noted that some industry executives have connections to the administration. President Trump nominated Paul Atkins to chair the SEC after Gary Gensler left in January 2025.
Subcommittee chair Representative Bryan Steil expressed a related concern: whether regulators are prepared as digital-asset technologies evolve. He urged Congress to provide clearer, less fragmented rules and alluded to a Senate market-structure bill that could change how oversight is organized.
Meanwhile, regulators have taken steps to coordinate despite the lack of comprehensive legislation. In March the SEC and the Commodity Futures Trading Commission signed a memorandum of understanding to coordinate market oversight, including for digital assets. The SEC also issued an interpretative notice explaining how it intends to apply federal securities laws to certain crypto assets.
SEC Chair Paul Atkins has described the commission’s interim approach as a “bridge” aimed at providing clarity while legislation such as the CLARITY Act—designed to give the CFTC clearer authority over some cryptocurrencies—remains stalled in Congress.
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