The U.S. Securities and Exchange Commission (SEC) has seen a significant shift in its approach to cryptocurrency enforcement, seemingly shaped by the priorities of different administrations.

Under Chair Gary Gensler’s tenure, the SEC (April 17, 2021, through January 20, 2025) adopted a broader regulatory approach. Under his leadership, the SEC expanded its enforcement efforts to also target crypto-adjacent firms — companies and activities closely linked to the crypto industry but not directly involved in issuing or trading digital assets. These included DeFi platforms (e.g., Uniswap,¹ Rari Capital),² staking services (e.g., Kraken,³ Coinbase),⁴ NFTs (e.g., Impact Theory,⁵ Stoner Cats),⁶ and stablecoins (e.g., TerraUSD).⁷ Gensler emphasized the SEC’s commitment to enforcing existing securities laws, using the Howey Test to evaluate digital assets, rather than creating new regulations specifically for the crypto industry.

In contrast, the current chair, Chairman Paul Atkins, has adopted a narrower enforcement approach, primarily avoiding crypto-adjacent cases unless strong evidence of investor harm was clear and present. The focus shifted back to traditional fraud cases, such as insider trading and Ponzi or Ponzi-like schemes, including those involving digital assets. Additionally, the introduction of the Charity Act and Genius Act has begun to establish a real regulatory framework for digital assets and stablecoins, aiming to “develop a comprehensive and clear regulatory framework for crypto assets.”⁸ These acts provided clarity on whether a digital asset is classified as a security or a commodity, ensuring greater regulatory certainty for market participants.

The SEC’s transition from Atkins’ narrow focus on high-impact frauds to Gensler’s broad regulatory enforcement reflects the agency’s evolving priorities in response to the rapid growth of the cryptocurrency industry.

Figure 1: Number of SEC Cryptocurrency Enforcement Actions by Type of Allegations, 2013-2024⁹

Calls for Clarity in Crypto Regulation

Gensler’s historic enforcement strategy has sparked debate within the crypto industry. Critics argue that the SEC’s reliance on enforcement rather than rulemaking creates uncertainty for businesses operating in the industry. In response, legislative proposals such as the Clarity Act and the Genius Act have been introduced to establish clearer guidelines for the industry.

1. The Clarity Act aims to define when a cryptocurrency is classified as a security versus a commodity, helping to delineate the SEC’s jurisdiction over the sector.
2. The Genius Act focuses on stablecoins, requiring 100% reserve backing with liquid assets like U.S. dollars or short-term Treasuries and requires issuers to make monthly, public disclosures of the composition of reserves, that must be reviewed by a CPA. 

These legislative efforts underscore the growing recognition that a rule-based system is essential for fostering innovation while ensuring investor protection.

Future Implications for Crypto Firms

Looking ahead, crypto firms must adapt to an evolving regulatory landscape. Key areas of focus include:

1. Disclosure: Firms should provide clear, plain-language explanations of their custody arrangements and the risks associated with their investment vehicles, avoiding misleading statements.¹⁰
2. Compliance Programs: Companies must implement well-designed and well-operated Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) programs to address regulatory requirements.

This policy shift has already prompted the SEC to dismiss significant lawsuits against crypto companies. Since January 2025, the agency has dropped cases against Coinbase and Binance, concluded an investigation into another crypto intermediary without further action, and reached an agreement with Ripple to withdraw cross-appeals. Although the court rejected Ripple’s request to reduce penalties and dissolve injunctive relief, both parties are expected to abandon their pending appeals.¹¹ These actions reflect the administration’s move away from enforcement-focused policy development. For companies in the crypto industry, maintaining transparency, ensuring compliance, and adopting proactive risk management strategies will be essential to navigating the evolving regulatory landscape.

First Big Enforcement Signal from SEC Chairman Paul Atkins

On September 5, 2025, the SEC announced the establishment of a Cross-Border Task Force to enhance its enforcement of U.S. securities laws and combat fraud involving foreign-based companies. The task force will focus on issues like market manipulation (“pump-and-dump” schemes), scrutinize gatekeepers such as auditors and underwriters, and address risks from companies in jurisdictions like China. Paul Atkins stressed the importance of protecting U.S. investors from international fraud, while also directing other SEC divisions to explore new rules and guidance to strengthen safeguards. 

1. Cheyenne Ligon, “SEC Drops Investigation Into Uniswap, Will Not File Enforcement Action,” Coinbase, February 26, 2025.
2. “SEC Charges DeFi Platform Rari Capital and its Founders With Misleading Investors and Acting as Unregistered Brokers,” U.S. Securities and Exchange Commission, press release, September 18, 2024.
3. “SEC Charges Kraken for Operating as an Unregistered Securities Exchange, Broker, Dealer, and Clearing Agency,” U.S. Securities and Exchange Commission, press release, November 20, 2023.
4. “SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency,” U.S. Securities and Exchange Commission, press release, June 6, 2023.
5. “SEC Charges LA-Based Media and Entertainment Co. Impact Theory for Unregistered Offering of NFTs,” U.S. Securities and Exchange Commission, press release, August 28, 2025.
6. “SEC Charges Creator of Stoner Cats Web Series for Unregistered Offering of NFTs,” U.S. Securities and Exchange Commission, press release, September 13, 2023.
7. “Tai Mo Shan to Pay $123 Million for Negligently Misleading Investors About Stability of Terra USD,” U.S. Securities and Exchange Commission, press release, December 20, 2024.
8. “SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force,” U.S. Securities and Exchange Commission, press release, January 21, 2025.
9. “SEC Cryptocurrency Enforcement: 2024 Update,” Cornerstone Research.
10. “Crypto Asset Exchange-Traded Products,” U.S. Securities and Exchange Commission, statement, July 1, 2025.
11. A. Kristina Littman, Erik Holmvik, and Kevin Burns, “SEC Enforcement – New Administration Update – First Half of 2025,” Willkie, client alert, July 7, 2025.
12. “SEC Announces Formation of Cross-Border Task Force to Combat Fraud,” U.S. Securities and Exchange Commission, September 5, 2025.