SEC Transfers Leading Crypto Litigator Amid Scaling Back of Crypto Enforcement Unit

In a move that has raised eyebrows, the Securities and Exchange Commission (SEC) has reportedly reassigned Jorge Tenreiro, its chief litigation counsel, from overseeing major enforcement cases to the agency’s IT department. This move comes as part of broader restructuring efforts at the SEC, including scaling back its crypto enforcement unit.

SEC’s Leadership Shuffle and Transfers

As reported by The Wall Street Journal on February 5, Tenreiro, who had been leading the SEC’s litigation efforts — particularly in overseeing lawsuits and investigations — has been moved to the agency’s computer systems management office. In addition to Tenreiro’s transfer, Natasha Guinan, a senior lawyer in the SEC’s chief accountant’s office, was also reassigned to an undisclosed role. Guinan had been instrumental in drafting Staff Accounting Bulletin 121 (SAB 121), the controversial 2022 rule that required financial firms to record crypto assets as liabilities on their balance sheets. The rule was recently revoked under acting SEC chair Mark Uyeda.

These changes come on the heels of an earlier report by The New York Times, which revealed that the SEC had begun scaling back its 50-member crypto enforcement unit. This included the reassignment of a top lawyer from the crypto unit, although it is unclear if Tenreiro was the individual mentioned.

Political Context and Potential Influence

The timing of the transfers coincides with President Donald Trump’s campaign promise to reduce the SEC’s regulatory crackdown on the crypto industry. Trump’s January 23 executive order established a crypto working group aimed at creating a clearer legal framework for the crypto sector, which may influence how the SEC approaches crypto-related enforcement going forward.

Tenreiro’s connection to the SEC’s crypto enforcement efforts goes back to October 2022, when he joined the crypto assets and cyber unit as deputy chief. He quickly took over as acting chief in June 2023 following the departure of the unit’s head, David Hirsch. During this time, Tenreiro played a key role in overseeing the SEC’s enforcement actions against major crypto companies, such as Coinbase, Ripple, and Tron.

Later, Tenreiro was promoted to lead the SEC’s litigation division. Notably, his role is not a political appointment, unlike the SEC chair or commissioners, and typically does not change with new administrations. He has been with the SEC since 2013, joining as a senior enforcement lawyer and playing a role in the SEC’s early efforts to crack down on initial coin offerings (ICOs) during Trump’s first term under then-chair Jay Clayton.

Under the leadership of acting chair Mark Uyeda, the SEC is looking to take a more balanced approach to crypto regulation. Efforts to ease regulatory pressure on the sector are now underway, with a focus on retroactive relief for token offerings in certain cases. A key player in these efforts is Hester Peirce, a crypto-friendly SEC commissioner tasked with leading a crypto task force to establish a clearer legal framework for the industry.

Looking Ahead: Regulatory Shift for Crypto

As the SEC’s restructuring unfolds, the question remains whether these moves signal a shift towards a less aggressive regulatory stance on crypto. Hester Peirce’s leadership of the crypto task force and the growing influence of pro-crypto voices in the SEC may pave the way for a more accommodating regulatory environment for crypto firms and investors.

In the meantime, an SEC spokesperson has declined to comment on the transfers, and both Tenreiro and Guinan have yet to respond to requests for comment.

The SEC’s recent personnel changes, particularly the reassignment of Jorge Tenreiro, come at a time of evolving crypto regulations in the United States. With regulatory uncertainty in the sector, the SEC’s shifting priorities could play a pivotal role in shaping the future of crypto enforcement and the broader legal landscape for digital assets.