SEC Commissioner Caroline Crenshaw broke precedent today with a scathing letter directed at the Commission’s pro-crypto turn. She accused it of willfully disregarding the law to promote the crypto industry’s interests.
The trigger for this outburst was the SEC’s decision to drop its lawsuit against Coinbase. Crenshaw’s term will end in June, and if she can keep her seat, she may become a very vocal critic.
Crenshaw Blasts SEC Over Coinbase
The SEC is one of the US’ top financial regulators, and trouble is brewing behind the scenes. Last December, the industry lobbied hard against Caroline Crenshaw, an anti-crypto Commissioner whose term was ending.
Crenshaw’s re-nomination effort failed due to this pressure, but she’s still on the SEC until June. Apparently, she has little to lose right now.
In a scathing letter posted to the SEC’s own website, Crenshaw criticized the Commission’s entire pro-crypto direction. The reason? The SEC dropped its lawsuit against Coinbase after signaling it would do so, and this was apparently a bridge too far.
Crenshaw claimed the move openly ignored 80 years of legal precedent to give the industry preferential treatment:
“Today’s action undermines the credibility of our Division of Enforcement. It creates the specter that the agency will deploy its enforcement resources in conjunction with election cycles or in favor of those with means. This invites criticism that our agency is politicized and sows distrust in government. Our agency’s job is to do what is right. This is not it,” she stated.
This criticism is particularly noteworthy because Crenshaw is still a Commissioner, and this is live on the SEC’s website. Compare it, for example, to the farewell letter that pro-crypto Commissioners wrote for ex-Chair Gary Gensler.
They praised his “extensive service,” “zealous advocacy,” and his personal friendship. In other words, SEC internal disputes are never this public.
Clearly, Crenshaw thinks the SEC’s pro-crypto shift is a grave mistake. Moreover, she referenced the industry’s stated desire for “regulatory clarity” and questioned whether it was sincere.
This may be a reference to Hester Peirce’s Crypto Task Force, which is about to host “Spring Sprint Towards Crypto Clarity” discussions with industry representatives.
In fairness, Crenshaw may have good reason to worry about the SEC’s future. The Commission has been ending a spree of crypto enforcement actions, and some of Gensler’s old targets have been grateful for the policy shift.
Others, however, have been openly vengeful towards the Commission and want to act decisively to prevent future enforcement.
Ultimately, the Coinbase lawsuit is just the beginning. Several cases like the SEC v Ripple are still active, and Crenshaw’s term won’t expire until after key deadlines.
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