Crypto Industry Challenges SEC Amid DOGE Initiative

Crypto industry leaders, including executives from Coinbase and Ripple, have responded to the Department of Government Efficiency (DOGE), an initiative led by Elon Musk, which is seeking public input on waste, fraud, and abuse within government agencies, including the Securities and Exchange Commission (SEC).

"DOGE is seeking help from the public! Please DM this account with insights on finding and fixing waste, fraud and abuse relating to the Securities and Exchange Commission," DOGE's SEC audit account posted on social media platform X on Feb. 17. The request has prompted responses from cryptocurrency advocates critical of the SEC's regulatory actions.

Paul Grewal, Chief Legal Officer of Coinbase, responded by proposing a policy change aimed at discouraging excessive SEC litigation. He shared on X:

Here's one: adopt a rule that defendants who defeat SEC lawsuits get all their attorney fees and costs from the Commission budget.

Attorney John Deaton also weighed in, stating that he had privately messaged DOGE with additional concerns. He pointed to the SEC's lawsuit against Dragonchain, calling it another example of regulatory overreach. "It is another non-fraud case filed by the SEC in its war against crypto," Deaton wrote, urging key figures such as crypto czar David Sacks, Executive Director of the President's Council of Advisers on Digital Assets Bo Hines, and SEC Commissioners Hester Peirce and Mark Uyeda to examine the case. He specifically called attention to Jorge Tenreiro's role in the SEC's decision-making, questioning the motivations behind the lawsuit.

Stuart Alderoty, Chief Legal Officer at Ripple, criticized the SEC's pattern of filing "follow-on" enforcement actions after the Department of Justice (DOJ) has already prosecuted financial crimes. He described:

One major source of waste at the SEC is its habit of filing 'follow-on' actions after the DOJ has prosecuted claims (see FTX). These cases add little value, often result in uncollectible penalties, and are more about headlines than investor protection. The SEC should focus on its core mission instead of duplicating efforts.