The US Securities and Exchange Commission (SEC), under its new leadership, is expected to reassess its stance on cryptocurrency-related cases.
“In the first few days of the new administration, the SEC is expected to begin a review of those court cases and potentially freeze some litigation that does not involve allegations of fraud,” a 16 January 2025 Reuters report confirmed.
Is this a turning point for US crypto regulation?
Some Cases Against Crypto Companies Could Be Withdrawn
The Gary Gensler Saga: A Crypto Story
From MIT blockchain professor calling BTC & ETH "not securities" to SEC's most aggressive chair: what a plot twist!
— 2018: "75% of crypto is outside SEC jurisdiction"
— 2024: Sues literally everyone
But in 5 days, a new chapter begins.… pic.twitter.com/cIZJXAd3ft
— SONAR (@SonarPING_) January 16, 2025
Under the tenure of outgoing SEC Chair Gary Gensler, the agency pursued an aggressive enforcement strategy against cryptocurrency firms. However, the incoming Trump administration has signaled a potential departure from this hardline approach. 83 enforcement actions were initiated, targeting major players like Coinbase, Binance, and Ripple Labs. These cases often revolved around allegations of securities law violations, such as selling unregistered tokens or failing to register platforms as exchanges.
Ripple, for instance, was accused of using its XRP token as an unregistered security to raise funds. While some companies opted to settle, others, including Ripple and Coinbase, chose to challenge the agency’s claims in court.
Reports suggest that Commissioners Hester Peirce and Mark Uyeda are exploring rule changes to provide greater clarity on when cryptocurrencies qualify as securities.
Trump’s SEC is considering revisions to accounting regulations that currently limit companies’ ability to hold cryptocurrencies on behalf of clients. These changes could pave the way for public consultations on crypto-specific rules, addressing longstanding concerns about regulatory uncertainty in the industry.
SEC Faces Leadership Change
The SEC faces leadership changes as Gensler announced plans to step down on 20 January 2025. Commissioner Jaime Lizárraga is also set to leave before Trump’s inauguration.
Meanwhile, Trump has selected Paul Atkins, a crypto advocate and former commissioner, as his choice to lead the SEC. He has also appointed David Sachs, a podcaster, as the ‘Crypto Czar’ in his cabinet. He also pledged to make America the "crypto capital of the world" through initiatives like World Liberty’s lending and borrowing platform.
As reported, the SEC has taken a tougher stance against crypto firms in 2024. More specifically, the regulator imposed nearly $4.7 billion in enforcement actions against crypto companies, a 3,018% increase from 2023.
