This isn’t a pivot. The SEC has never hated crypto. There are videos of Gary Gensler lecturing about crypto years ago - he definitely knows his stuff, and he’s not an idiot. The SEC are, and have always been, broadly neutral on crypto. But the SEC have a job: to protect people from scams. Crypto is FULL of scams, rugpulls, and other shady behaviour. It’s the SEC’s job to stop the scams and protect investors.

The SEC doesn’t have the resources to go after all the scams in crypto. They are already overstretched and underfunded, and when there are multiple scams/rugpulls per DAY in crypto (per minute in memecoins), they simply cannot issue a lawsuit every time, which would take multiple lawyers multiple days/weeks each time. They only have enough lawyers/money to issue about 1 lawsuit per month. That’s it.

They know the only way to deal with all the scams is by having congress enact proper laws and regulations. These laws have been in the pipeline for years but take ages to properly finish. It’s congress and the executive branch that have that task, and they’re taking so long, because they want to get it right on the first try. They are writing these laws, slowly and quietly.

So in the meantime, while we wait, the SEC have been pursuing a policy of ‘regulation by deterrence’, going after the largest and most visible crypto organisations to ‘send a message’, whilst simultaneously trying to drag everything out for as long as possible, because their main job is to wait for the regulations to be finished and signed into law, rather than actually punish those companies.

By targeting the largest and most visible companies (e.g. Coinbase, Uniswap, Ripple, and recently even Ethereum/The Ethereum Foundation), rather than the most scammy companies (of which there are too many to list), they get the most exposure and most deterrence per their limited resources. They don’t intend to win - they intend to make a lot of noise, and drag it out for as long as possible, because their goal is not to crush crypto, it’s to deter scams. It’s to send a message to anyone less compliant than Coinbase; if Coinbase is fucked, you’d better just stop. Deterrence is all they can do with their resources. There is no other reason why they would go after the most legitimate and compliant companies.

If you can remember the sentiment before 2023, US lawmakers were talking about crypto very positively, optimistically, and with clear intentions to embrace crypto. They are still positive - but the narrative of ‘SEC hates crypto’ took over briefly, when the narrative should be ‘SEC are deterring scams by high-profile lawsuits and delaying everything until proper laws come in’.

Other narratives are short-sighted, and assuming bad faith. The idea of a ‘pivot’ is nonsense; it’s always been like this.

It’s really a case study in regulation by deterrence.

This isn’t a pivot. The SEC has never hated crypto. There are videos of Gary Gensler lecturing about crypto years ago - he definitely knows his stuff, and he’s not an idiot. The SEC are, and have always been, broadly neutral on crypto. But the SEC have a job: to protect people from scams. Crypto is FULL of scams, rugpulls, and other shady behaviour. It’s the SEC’s job to stop the scams and protect investors.

The SEC doesn’t have the resources to go after all the scams in crypto. They are already overstretched and underfunded, and when there are multiple scams/rugpulls per DAY in crypto (per minute in memecoins), they simply cannot issue a lawsuit every time, which would take multiple lawyers multiple days/weeks each time. They only have enough lawyers/money to issue about 1 lawsuit per month. That’s it.

They know the only way to deal with all the scams is by having congress enact proper laws and regulations. These laws have been in the pipeline for years but take ages to properly finish. It’s congress and the executive branch that have that task, and they’re taking so long, because they want to get it right on the first try. They are writing these laws, slowly and quietly.

So in the meantime, while we wait, the SEC have been pursuing a policy of ‘regulation by deterrence’, going after the largest and most visible crypto organisations to ‘send a message’, whilst simultaneously trying to drag everything out for as long as possible, because their main job is to wait for the regulations to be finished and signed into law, rather than actually punish those companies.

By targeting the largest and most visible companies (e.g. Coinbase, Uniswap, Ripple, and recently even Ethereum/The Ethereum Foundation), rather than the most scammy companies (of which there are too many to list), they get the most exposure and most deterrence per their limited resources. They don’t intend to win - they intend to make a lot of noise, and drag it out for as long as possible, because their goal is not to crush crypto, it’s to deter scams. It’s to send a message to anyone less compliant than Coinbase; if Coinbase is fucked, you’d better just stop. Deterrence is all they can do with their resources. There is no other reason why they would go after the most legitimate and compliant companies.

If you can remember the sentiment before 2023, US lawmakers were talking about crypto very positively, optimistically, and with clear intentions to embrace crypto. They are still positive - but the narrative of ‘SEC hates crypto’ took over briefly, when the narrative should be ‘SEC are deterring scams by high-profile lawsuits and delaying everything until proper laws come in’.

Other narratives are short-sighted, and assuming bad faith. The idea of a ‘pivot’ is nonsense; it’s always been like this.

It’s really a case study in regulation by deterrence.