The US Securities and Exchange Commission (SEC) could be in the firing line of the newly created Department of Government Efficiency (DOGE).
A new DOGE account has been created on X (formerly Twitter), Elon Musk’s social media platform, called ‘DOGE SEC’. This suggests that the department is planning an imminent audit of the SEC.
So far the account has only posted once, in which it asked followers to message the account ‘with insights on finding and fixing waste, fraud and abuse relating to the Securities and Exchange Commission’.
This was subsequently reshared by Elon Musk on his own personal X account.
Musk, DOGE and the regulatory chopping block
DOGE was announced as a new government department tasked with reducing government spend, specifically with ‘cutting government waste’, shortly after Donald Trump won the November 2024 presidential election.
Since Trump’s inauguration last month, Musk has taken on his cost-cutting job with a lot of enthusiasm. Financial services regulators have found themselves in the crosshairs of this new department and its mission.
One of the most notable developments so far has involved the Consumer Finance Protection Bureau (CFPB), with then-Acting Director Russell Vought – now replaced by Treasury Secretary Scott Bessent – telling all staff at the agency to cease operations last week.
It seems that Musk played a central role in the decisions to half operations at the CFPB, with the consumer protection regulator apparently on his cost-cutting agenda. In an X post shortly after the order was given, Musk stated ‘CFPB RIP”.
Should similar developments happen at the SEC, it could have significant knock on effects on the finance, fintech and payments sectors, particularly with regards to any ongoing investigations the regulator may be engaged with.
As with other Musk cost cutting exercises since the businessman began his government role, his actions with the CFPB and SEC have been controversial.
In particular, the fact that the CFPB and SEC had existing investigations open into some of his companies has been highlighted by some commentators and politicians as constituting a serious conflict of interest.
Whatever Musk’s plans for the SEC are, however, remain to be seen. As we do not have a crystal ball, it is also unclear whether DOGE will eventually turn its attention to the CFTC, one of the US’ other major financial regulators.
The fact that the CFTC will likely play a key role in formulating and enforcing any crypto regulations the Trump administration develops may save the regulator from any chopping block, however.
This is because support for cryptocurrency is a key part of Trump’s fiscal agenda, and it has been hinted both pre and post-election the CFTC will be very significant for this. This agenda includes his support for stablecoins and other privately held cryptocurrencies but not CBDCs, which Trump is extremely opposed to.
