The SEC has reassigned Jorge Tenreiro, its top crypto litigator, to an unspecified position in its IT Department. Instead of more enforcement, the Commission’s Crypto Task Force seeks to reorient its relationship with the industry.
Hester Peirce was adamant that the SEC is still determined to stop fraud, but actions like this may hamper its ability to do so in the future.
The SEC Turns a New Leaf on Crypto
The SEC has undertaken many changes since its previous Chair Gary Gensler resigned. Under Gensler’s direction, the SEC dramatically increased its legal battles against the crypto industry, building a great deal of resentment.
The Commission is turning a new leaf, however, reassigning Jorge Tenreiro, its top crypto litigator, to a job in the IT Department.
“I disagreed with the legal strategy that Tenreiro was asked to execute—achieving regulation of crypto through the courts. Writing new rules for the industry would have given investors more protection in the near term while allowing the industry to grow,” said Jason Gottlieb, a defense attorney who frequently defended crypto firms against SEC suits.
Tenreiro was the lead litigating counsel in the SEC’s lawsuit against Ripple Labs, alleging that the company conducted an unregistered securities offering by selling XRP tokens.
He also played a pivotal role in the SEC’s action against Telegram, which resulted in halting the company’s $1.7 billion unregistered digital token offering.
However, the SEC is changing its approach to crypto regulation, and Tenreiro was swept up in these changes. Yesterday, the Commission substantially downsized its crypto enforcement unit, reassigning over 50 lawyers and staff. These changes have been brewing ever since Donald Trump’s re-election.
Since Gensler’s exit, the commission has shown several hints to drop the Ripple case. Most recently, the SEC completely removed the lawsuit from its website. Reassigning Tenreiro to a non-crypto-related role further suggests that the lawsuit might be coming to an end.
Specifically, the SEC plans to replace Gensler’s anti-industry litigators with a new Crypto Task Force. Yesterday, Commissioner Hester Peirce detailed its role, claiming that it will prioritize delegating certain enforcement functions away from SEC jurisdiction.
Although this is ostensibly bullish news for crypto, it’s still part of a worrying trend. Tenreiro was not a political appointee; he followed Gensler’s directives. Many believe that publicly reassigning him like this is an act of humiliation, likely encouraging him to resign.
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