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Elon Musk’s D.O.G.E. is investigating SEC inefficiencies, sparking debate on crypto regulation and government oversight.
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The crypto industry turned the SEC into an ally, making D.O.G.E.’s attack a potential misstep for pro-crypto policies.
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Coinbase’s CLO supports punitive measures against the SEC, highlighting divisions within the crypto community.
Elon Musk’s D.O.G.E. investigates SEC inefficiencies, raising questions on crypto regulation as the industry turns its past foe into an ally.
Will D.O.G.E. Attack the SEC?
Since Elon Musk’s Department of Government Efficiency (D.O.G.E.) first took off, it’s had a notable impact on the US regulatory apparatus. In addition to crypto-friendly experiments, Musk has instituted mass layoffs at all layers of the federal government.
According to a recent post, D.O.G.E. is now taking aim at the SEC:
“D.O.G.E. is seeking help from the public! Please DM this account with insights on finding and fixing waste, fraud and abuse relating to the Securities and Exchange Commission,” the account claimed.
In other words, D.O.G.E. may be planning to institute significant cuts at the SEC. Musk’s efforts to purge the federal government of inefficiency have yielded pushback from some sectors and caused mistakes in others, but his campaigns have continued nonetheless.
However, the Commission may find an unlikely ally in the crypto industry itself.
It took years of fighting to get former Chair Gary Gensler out of the SEC, but since President Trump heralded a new wave of pro-crypto sentiment, the Commission has made crucial changes benefiting the crypto space.
It has abandoned some enforcement capabilities, dropped lawsuits, consulted the industry for policies, considered new ETFs, and more.
The Commission as a Crypto Ally
The crypto industry had to fight long and hard to turn Gary Gensler’s Commission into an ally. If D.O.G.E. were to jeopardize the SEC, that could prove to be an unfortunate own goal.
Hester “Crypto Mom” Peirce, leader of the new Crypto Task Force, recently gave an interview where she strongly opposed cuts to the SEC.
“We have a lot of really fantastic people at the SEC, who are doing important work. One thing to remember is that US capital markets are not only large but also vital, the most significant in the world! There’s always more we can do. It’s a question of getting the balance right, using the resources that we have,” Peirce stated.
All that implies the Commission can be a powerful tool for the crypto industry, but it requires skilled personnel to enact pro-crypto policies effectively. If D.O.G.E. attempts to dismantle the SEC, it risks losing a valuable ally.
While Musk may advocate for minimal regulations in the crypto sector, achieving and maintaining such a status quo may not only be impossible but politically dangerous.
Not everyone within the crypto community shares the same perspective. Paul Grewal, CLO of Coinbase, has adopted a hardened stance after experiencing extensive legal battles.
In a social media post, Grewal stated D.O.G.E. should compel the SEC to pay defendants’ legal fees in unsuccessful enforcement actions. This could lead to direct payouts for Grewal personally and could foster future hostility.
This is a highly contentious issue with much uncertainty regarding the strategy D.O.G.E. will pursue with the SEC or which industry figures will take a stand on the matter.
Community nostalgia for Gary Gensler is emerging, particularly for his strict stance against the now-flourishing culture of crypto scams. It seems likely that segments of the community may defend the SEC’s actions.
Conclusion
The debate on whether D.O.G.E. will proceed with its attack on the SEC or solidify its role as a regulatory ally remains unresolved. Nonetheless, the crypto landscape continues to evolve, and understanding these dynamics is vital for stakeholders. As the industry grapples with regulatory clarity, maintaining a collaborative relationship with the SEC may be crucial for fostering growth and innovation.
