Pro-Crypto SEC Official Cicely LaMothe Retires After 24-Year Career

In a significant development for the cryptocurrency ecosystem, Cicely LaMothe, the deputy director of Corporation Finance at the Securities and Exchange Commission (SEC), has officially retired after an impressive 24-year career. LaMothe has played a pivotal role in shaping crypto-related policy, guiding seven major crypto guidance documents through the agency during her tenure.

Key Takeaways

Cicely LaMothe retired from the SEC after 24 years, influencing key crypto regulations.
She oversaw the release of vital guidance documents that clarified regulations for crypto companies.
LaMothe’s leadership came under scrutiny due to her involvement with Tron’s Nasdaq listing.
Her departure aligns with broader changes at the SEC, including reduced enforcement actions against crypto firms.
The agency is experiencing significant staff turnover amid ongoing policy shifts led by the new SEC chair.

A Legacy of Crypto Guidance at the SEC

LaMothe's final years at the SEC were marked by her oversight of seven critical CF Staff Statements that addressed the rapid evolution of crypto. These statements covered various topics, including liquid staking, stablecoins, meme coins, and crypto exchange-traded products. They provided essential clarity on disclosure requirements that helped digital asset companies navigate SEC registration processes.

“After more than two decades at the SEC, I depart with a deep sense of honor and gratitude for the opportunity to serve the American public,” LaMothe stated in the SEC's announcement. She noted that her work was both challenging and rewarding, allowing her to learn from dedicated colleagues committing their efforts to the agency's mission.

In addition to her crypto policy work, LaMothe improved the process for companies submitting draft registration statements and made notable contributions to speeding up filings that involve mandatory arbitration provisions. She also issued over 25 Compliance and Disclosure Interpretations related to various regulatory topics.

Congressional Scrutiny and Regulatory Oversight

LaMothe found herself in the spotlight in September when Senator Jeff Merkley and Representative Sean Casten raised concerns about her oversight of Tron’s reverse merger with Nasdaq. The lawmakers questioned the SEC's choice to pause enforcement actions against Tron’s founder Justin Sun, who took the company public through this merger.

Merkley and Casten indicated that Sun's involvement with cryptocurrency projects connected to the Trump family raised questions about the motivations behind the SEC's delay. They also expressed concerns regarding Tron's alleged links to the Chinese government and its implications for national security. Their inquiries highlighted the need for greater clarity on how the SEC could safeguard investors in light of such settlements.

Retirement Amid Major SEC Policy Transformations

LaMothe's retirement marks a notable point in the SEC's evolution under the leadership of Gary Gensler’s successor, Paul Atkins. Since his appointment in April, the SEC has dramatically altered its approach, reducing crypto enforcement actions by nearly 60%. This includes significant cases against industry giants such as Coinbase, Kraken, and Binance.

Atkins announced to Fox Business that the SEC is now providing warning notices ahead of enforcement actions, which contrasts sharply with Gensler’s more aggressive lawsuit-first strategy. He also acknowledged that many digital tokens do not qualify as securities, supporting the trading of tokenized assets under similar legal frameworks as their underlying instruments.

In a further push towards innovation, the SEC has established a Crypto Task Force and is working on an innovation exemption designed to benefit crypto firms exploring blockchain-based services. Atkins hopes to finalize this initiative by the end of the year, despite facing economic and political obstacles.

While LaMothe leaves her position, the SEC is also experiencing considerable staff turnover, with reports indicating a loss of up to 19% of full-time employees in key divisions. Representative Maxine Waters has called for oversight hearings with Atkins, expressing concerns over whether the SEC has enough personnel to fulfill its mission amidst what she described as unprecedented politicization during the previous administration.

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