The U.S. Securities and Exchange Commission is overhauling its approach to digital assets, stating on Tuesday that numerous past enforcement actions against crypto firms misinterpreted securities laws and failed to benefit investors.
In a review of its 2025 fiscal year enforcement results, the agency disclosed that since the 2022 fiscal year, it brought 95 actions for “book-and-record violations.” “Together with seven crypto firm registration-related and six ‘definition of a dealer’ cases, these cases identified no direct investor harm from those violations, produced no investor benefit or protection,” the SEC said in a statement.
The announcement marks a significant pivot under Chair Paul Atkins, who took the helm in April 2025. He said the agency is moving away from a focus on the volume of cases and record-setting penalties. “We have redirected resources toward the types of misconduct that inflict the greatest harm—particularly fraud, market manipulation, and abuses of trust,” Atkins said.
This policy shift represents a formal end to the "regulation-by-enforcement" strategy associated with former Chair Gary Gensler. For the U.S. crypto industry, this could lower the perceived risk of arbitrary legal action and improve market confidence, potentially encouraging more domestic innovation and investment.
The SEC's report criticized actions taken in the lead-up to the 2025 presidential inauguration as an “unprecedented rush” to pursue novel legal theories. This approach, the agency now says, reflected a “bias for volume of cases brought versus matters of investor protection.”
Data from consulting firm Cornerstone Research supports this view, showing that enforcement actions against public companies, including crypto firms, fell by approximately 30 percent in fiscal 2025 compared to the prior year under Gensler. Despite the overall decrease, the SEC still obtained orders for $17.9 billion in monetary relief in 2025, comprising $7.2 billion in civil penalties.
While the agency's stance on certain types of violations has softened, it continues to pursue clear cases of fraud. In May 2025, the SEC sued Unicoin for allegedly raising $100 million by misleading investors, a charge the company disputes.
Separately, a civil complaint against Ramil Ventura Palafox, CEO of Praetorian Group International, for an alleged $200 million Ponzi scheme ran parallel to a criminal case from the Department of Justice. That case resulted in Palafox receiving a 20-year prison sentence in February.
This article is for informational purposes only and does not constitute investment advice.
