Mike Selig, a partner at Willkie Farr & Gallagher, has called for the next chair of the U.S. Securities and Exchange Commission (SEC) to promote innovation in the cryptocurrency sector and to cease what he describes as the agency's "regulation by enforcement" approach. Selig expressed these views in a post dated November 19.
"Whomever President Trump appoints as SEC Chair must take a 'do no harm' approach to the regulation of crypto asset markets and encourage technological innovation within the U.S," said Selig. "This can be done through exemptive relief, safe harbors and an end to regulation by enforcement."
According to a report from Social Capital Markets, SEC fines against the crypto industry have surged from $150.26 million in 2023 to $4.68 billion in 2024, representing a 3018% increase, as previously reported by Federal Newswire. Despite this significant rise in penalties, industry participants argue that there remains a lack of regulatory clarity within the crypto ecosystem. SEC Commissioner Mark Uyeda commented on this issue, stating: "I think our policies and our approach over the last several years have been just really a disaster for the whole industry." He emphasized the need for clear guidance and interpretations regarding what falls within and outside of securities laws.
Roslyn Layton, a senior fellow at the National Security Institute, highlighted that while the SEC has pursued numerous "non-fraud enforcement actions" against crypto companies, it has yet to issue any regulatory guidelines on registering digital assets or determining their status as securities. She noted: "There are no forms, no instructions and no published rules for registration." Layton further criticized the SEC's lawsuits for seeking penalties so large that many companies cannot contest them, adding that those who do fight back "have exposed how truly bad the SEC’s faith has become."
Selig's practice at Willkie Farr & Gallagher LLP focuses on financial regulations intersecting with crypto technologies. He advises clients on rules issued by various agencies including the SEC, Commodity Futures Trading Commission (CFTC), and Financial Crimes Enforcement Network (FinCEN).
SEC Chair Gary Gensler announced his resignation effective January 20, 2025. In his statement, Gensler expressed gratitude towards President Biden for entrusting him with his role: "The SEC has met our mission and enforced the law without fear or favor."
