SEC is no longer a ‘cop on the crypto beat‘, says US lawmaker

Opposing viewpoints on how regulators keep pace with technology were on view as a US House panel on Thursday examined different approaches to digital asset regulation at the Securities and Exchange Commission (SEC).

One viewpoint evident at the hearing of the House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, was voiced by ranking member and Massachusetts Representative Stephen Lynch who said he “wholly embraced” the idea that innovative technology could be used for “tremendous good,” but expressed concern with “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,” said Lynch, 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.”

Representative Stephen Lynch speaking at subcommittee hearing on Thursday. Source: House Financial Services Committee

Lynch was referring to the SEC under President Donald Trump dropping investigations or enforcement actions against a number of crypto companies including Ripple Labs and Coinbase, some of whose executives have close ties to the administration. Trump nominated Paul Atkins to chair the SEC after the departure of former chair Gary Gensler in January 2025.

Representative Bryan Steil, who chairs the subcommittee, cited concerns about whether regulators were “prepared to meet the moment” on technologies like digital assets. He also said that Congress was responsible for providing clarity and eliminating “fragmentation and uncertainty,” hinting at the crypto market structure bill moving through the Senate.

Regulators are coordinating on crypto in the absence of market structure

Earlier this month, the SEC and Commodity Futures Trading Commission (CFTC) signed a memorandum of understanding as part of measures to coordinate oversight of financial markets, including digital assets. Days later, the SEC issued an interpretative notice on how it intended to treat crypto assets under federal securities laws.

SEC Chair Paul Atkins said that the commission’s approach would represent a “bridge” to clarify crypto regulation with Congress stalled on the passage of the CLARITY Act, a bill to establish a market structure framework for digital assets. The legislation is expected to give the CFTC more authority in overseeing cryptocurrencies.