The US Securities and Exchange Commission (SEC) is planning to lay off regional office directors as part of a cost-cutting strategy. According to Reuters, the SEC notified directors of 10 offices across the US on February 21 that their positions would be eliminated in a plan to be submitted next month.
No Office Closures, But Staff Cuts
Despite the layoffs, the report said the SEC has no plans to close any offices. However, this is not the first time the SEC has scaled back its operations. Last June, the agency closed its Salt Lake City center after a federal judge fined the SEC $1.8 million for “bad faith” in its case against cryptocurrency company DEBT Box. Two lawyers involved in the case resigned in April.
Changes under the Trump administration
The layoffs come amid a push by the Trump administration to cut federal spending. The new administration has taken steps to reduce staff and resources at government agencies, including the SEC. Part of the overhaul is being overseen by the Elon Musk-led Department of Government Efficiency.
In addition, an account on the X platform related to DOGE has posted a call for the public to provide information about cases of “waste, fraud, and abuse” within the SEC. This signals increased scrutiny of the agency’s operations from stakeholders.
Impact on the crypto industry
The high-level layoffs mark a major shift in SEC policy. Under former Chairman Gary Gensler, the agency took a tough stance on the cryptocurrency industry, bringing numerous lawsuits against companies in the space. However, the SEC is now scaling back its crypto enforcement team and putting some cases on hold. Several key crypto executives have also been reassigned to other divisions, such as information technology.
Vote on firing
The decision to fire the regional director will require approval from the SEC’s current three-member committee, which includes two Republicans, Mark Uyeda and Hester Peirce, and one Democrat, Caroline Crenshaw.
In its budget proposal to Congress in March, the SEC requested $2.6 billion for fiscal year 2025, but insisted that the spending was “deficit neutral.” SEC divisions are required to report to Acting Chairman Mark Uyeda on the reorganization plan by February 25.
The SEC’s New Direction
The majority of SEC staff will remain based at its headquarters in Washington, D.C., while regional offices are tasked with supervising and investigating financial firms locally. The removal of regional directors could change the way the SEC regulates and supervises, especially with regard to the cryptocurrency industry and decentralized finance companies.
The move signals a gradual shift in the SEC’s regulatory focus, possibly toward a less hands-off approach to the cryptocurrency market. However, the specific impact of this restructuring will depend on the agency’s upcoming policies and the response from the financial industry.
