According to The Wall Street Journal, the SEC dropped its investigation into Uniswap Labs on February 26. Previously, it had also either abandoned or delayed probes into OpenSea and Coinbase.

Since Gary Gensler took over the SEC, the crypto community has been vocal about U.S. regulatory policies. As the crypto market grew, the SEC’s fines skyrocketed, reaching a staggering $4.7 billion in 2024—surpassing the total fines of the past six years combined (with the Terraform Labs UST incident accounting for a significant portion). Over the past decade, the SEC has issued nearly $3 billion in fines related to digital assets.

However, with Trump’s election and his pro-crypto stance, the SEC has begun easing its regulatory grip on the industry, creating what some describe as a “regulatory vacuum.” On February 4, the SEC announced a new Crypto Working Group, signaling a significant shift in the U.S. regulatory approach. This initiative aims to bring more clarity to the regulatory framework for digital assets while fostering innovation. But what does this shift mean for the market? As regulatory winds change, what’s next for crypto compliance?

Regulatory Shift

Previously, the SEC’s crackdown extended to major exchanges (such as Binance, Coinbase, and Kraken) and top crypto projects (such as Ripple, TON, and Consensys). Ripple Labs, for instance, faced a $125 million fine over whether XRP should be classified as a security under U.S. law. Telegram was fined $1.24 billion for illegally selling unregistered tokens during its TON token issuance. These cases highlight how the SEC has historically focused on individual enforcement actions rather than establishing broad regulatory guidelines, creating uncertainty within the crypto industry.

With growing pushback from the crypto sector, 18 U.S. states filed lawsuits against the SEC and its commissioners in November 2024, accusing them of overstepping their authority and unfairly targeting the crypto industry. In a September 2024 interview with Foresight News, SEC Commissioner Hester M. Peirce, known as “Crypto Mom,” expressed disappointment with the agency’s regulatory stance:

“I’m frustrated by our lack of progress, which motivates me to continue advocating for better engagement with the crypto world. I hope the SEC evolves beyond just being a ‘Securities and Enforcement Commission’ so crypto projects feel they can communicate with us and register when necessary.”

Following this turning point, former SEC litigation counsel and BakerHostetler partner Teresa Goody Guillén predicted that the number of cases the SEC brought against crypto firms would decrease in the coming year, with future enforcement actions likely limited to cases involving securities.

Further Reading: Interview with SEC’s ‘Crypto Mom’: Behind $3B in Fines Over a Decade Lies U.S. Regulatory Stagnation

The New SEC

Recent developments indicate that the SEC is steadily shifting toward regulatory compliance rather than enforcement. The agency has:

• Withdrawn appeals against rulings that challenged its regulatory stance on crypto trading rules.
• Advanced the classification and regulatory framework for crypto assets.
• Halted or dropped lawsuits against crypto mining firm Geosyn Mining, trading platform Robinhood Crypto, NFT marketplace OpenSea, and DEX Uniswap.

In this evolving landscape, ETF approvals are accelerating, including significant progress on staking ETFs. On February 20, Fox journalist Eleanor Terrett reported that sources close to the SEC said the agency is “very, very interested” in staking, and on February 5, its Crypto Working Group met with representatives from Jito Labs and Multicoin Capital to discuss the potential inclusion of staking in exchange-traded products (ETPs) and the possible models for staking in crypto asset ETPs.

Driving these changes is the newly established SEC Crypto Working Group, formed in February 2025. The group aims to systematically address legal uncertainties in the industry and enhance regulatory transparency and predictability. Led by Peirce, its primary goal is to define the status of crypto assets under securities laws, establish a clear regulatory framework, and provide temporary exemptions for compliant projects.

Peirce outlined the group’s key priorities:

1. Defining Boundaries: The group operates strictly within the SEC’s statutory authority while collaborating with other regulators to build a comprehensive and coordinated regulatory framework. One key initiative is promoting cross-border regulatory sandboxes, where projects can conduct limited-scale trials under different jurisdictions.
2. Gradual Implementation: Given the complexity of crypto regulation, reforms cannot happen overnight. The group aims to advance policies gradually, ensuring they are methodical and legally sound.
3. Efficient Processing: To better accommodate industry needs, the group will expedite exemption applications, no-action letters, and registration filings, improving efficiency and reducing unnecessary delays.

From the SEC’s perspective, Peirce and her team have become a stabilizing force in the regulatory landscape. In a previous interview, she stated:

“I want people to know that the U.S. SEC is open to innovators from anywhere. We want people to come here and build, just as investors from around the world come to participate in our capital markets because they are some of the best in the world. I want the quality of our markets to be the reason people choose to build here.”

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