In summary
Elon Musk’s D.O.G.E. is investigating the SEC’s shortcomings, sparking debate about cryptocurrency regulation and government oversight.
The cryptocurrency industry has turned the SEC into an ally, making D.O.G.E.’s attack potentially a misstep for pro-crypto policies.
Coinbase’s legal director supports punitive measures against the SEC, highlighting the divisions within the cryptocurrency community.
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Elon Musk’s D.O.G.E. is investigating the SEC, seeking input on “waste, fraud, and abuse” at the Commission. This could backfire on the crypto industry, which has already outmaneuvered Gary Gensler and turned the SEC into a useful ally.
Hester “Crypto Mom” Peirce argues for competent personnel to implement pro-crypto policies, but not everyone agrees. Coinbase’s CLO has suggested severe punitive measures against the Commission.
Will D.O.G.E. Attack the SEC?
Since Elon Musk’s Government Efficiency Division (D.O.G.E.) began operations, it has had a significant impact on U.S. regulatory agencies. In addition to crypto-friendly experiments, Musk has implemented massive layoffs across all levels of the federal government.
According to a recent post, D.O.G.E. is now targeting the SEC:
“D.O.G.E. is seeking the public’s help! Please DM this account with details on finding and fixing waste, fraud, and abuse relating to the Securities and Exchange Commission,” the account stated.
In other words, D.O.G.E. may be planning similar major cuts at the SEC. Musk’s effort to eliminate inefficiency in the federal government has met resistance in some quarters and resulted in missteps elsewhere, but his campaigns continue.
However, the Commission may find help from an unlikely ally: the crypto industry itself.
Despite years of fighting to remove the former Chairman Gary Gensler from the SEC, he’s not coming back. Since the new wave of pro-crypto sentiment initiated by the previous President, the Commission has done a lot for crypto.
They are abandoning enforcement possibilities, dropping lawsuits, advising the industry on policy, considering new ETFs, and much more.
The Commission as a Crypto Ally
In other words, the crypto industry has long struggled to turn Gary Gensler’s Commission into an ally. If D.O.G.E. dismantles the SEC, wouldn’t that be an unfortunate own goal?
Hester “Crypto Mom” Peirce, the leader of the new Crypto Task Force, recently gave an interview where she strongly opposed cutting back the SEC.
“We have a lot of great people at the SEC who are doing very important work. One thing to remember is that the capital markets in the U.S. are not only large but very important, the most important in the world! There’s always more we can do. It’s a question of getting the balance right, using the resources we have,” Peirce stated.”
All that to say that the Commission can be a powerful tool for the crypto industry, but it needs competent personnel to implement pro-crypto policies. If D.O.G.E. tries to dismantle the SEC, it may lose a useful ally.
Even if Musk wants zero regulation for the crypto industry, that’s not possible and even politically dangerous to maintain that status forever.
Of course, not everyone in the crypto industry sees it that way. Paul Grewal, Coinbase’s CLO, has developed a hardened stance after years of legal battles.
In a social media post, he said that D.O.G.E. should force the SEC to pay legal fees to defendants in failed enforcement actions. This would involve direct payments to Grewal personally, and could create future animosity.
Overall, this is a very contentious issue. It is not yet clear what strategy D.O.G.E. will pursue with the SEC or which figures in the industry will speak out on the matter.
However, the community is reminiscing about Gary Gensler, who actively fought against the burgeoning crypto scam culture. It seems some parts of the community will defend the SEC.
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