Crenshaw Warns SEC’s Crypto Rulebook Is Falling Apart

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Caroline Crenshaw Warns SEC’s Crypto Rulebook Is Falling Apart Like Jenga

Written by Aaron S.,

Editor-In-Chief

Last Updated: May 20, 2025

Key Takeaways

Crenshaw warned that removing key SEC rules without review could destabilize crypto markets;
She criticized the SEC for quietly weakening policies and reducing enforcement in crypto cases;
Using FTX as an example, she said ignoring crypto risks now could lead to bigger problems later.

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Caroline Crenshaw Warns SEC’s Crypto Rulebook Is Falling Apart Like Jenga

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Caroline Crenshaw, the only Democrat currently serving on the US Securities and Exchange Commission (SEC), raised concerns about the SEC’s shift in approach to crypto oversight.

Speaking at the SEC Speaks event on May 19, she said the agency is removing key rules without proper review, and compared the situation to a game of Jenga, where pulling out too many blocks can bring the whole tower down.

Crenshaw stated that the SEC had spent years building a system of rules meant to support market stability. She warned that some of those rules are being taken apart in ways that could create new risks, especially in the crypto industry.

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She said that the SEC has used internal guidance to quietly weaken or reverse existing policies, without involving the public or fully explaining the reasons. These actions showed that the agency might not fully enforce the rules in some crypto-related situations.

Crenshaw also criticized what she called "regulation by non-enforcement", which pointed out that the SEC has stepped back from taking action in many areas. She believes this damages the agency’s ability to win in court and creates confusion about which rules still apply.

To make her point, she used the collapse of FTX in 2022 as a reminder of what can go wrong when crypto markets are left unchecked. Crenshaw noted that while the risks still exist, the urgency to address them seems to have faded.

Meanwhile, SEC Chair Paul Atkins recently discussed how blockchain could introduce new methods for managing investments. What did he say? Read the full story.