The end of multiple Securities and Exchange Commissions (SEC) investigations into cryptocurrency companies is a powerful signal that the agency's approach to enforcement is changing rapidly under the Trump administration.
The tide shift has brought a more crypto-friendly leader back to Washington after four years of solid policies from the Biden administration and a major push from the cryptocurrency industry.
The crypto sector, which has poured nearly $250 million into various 2024 races up and down the vote, is hardly surprising to see the fast actions in the SEC under President Trump, who has pledged to prioritize US leadership in the digital currency field.
“We felt that in the crypto space was very deceiving in their way. [the Biden administration] I've been dealing with crypto companies. “We're committed to providing a great opportunity to help you,” said Nic Carter, founding partner at Castle Island Ventures, Crypto Investment Fits Partner. “There was no meaningful way to do that.”
Over the past three weeks, the SEC has closed or suspended a series of investigations from crypto companies. Legal suspension request In a lawsuit against Vinanence, the world's largest cryptocurrency exchange.
In a court application, the regulator said the new cryptographic task force launched by Chairman Mark Weda “impacts and promotes the potential resolution” of the Binance case, which originally accused of being involved in a “net of deceptions.”
And in just last week, the institution closed separate investigations or litigation against the crypto division of Robinhood, a decentralized finance company. UNISWAP Lab Blockchain Software Group Consensus
Last Thursday, the SEC officially dismissed the lawsuit. Against CoinbaseThe largest cryptocurrency platform in the US
The companies quickly praised the decision. Blockchain Association CEO Christen Smith I said “The era of enforcement regulation, and the intimidation, is coming to an end,” cites the SEC's “fresh perspective.”
The changes in the SEC are being rolled out, but people in the sector say they are in a reset phase where the agency will revoke the policy from former SEC chair Gary Gensler.
The crypto industry has long advocated for clearer regulations and guidelines, but a reset is required before the SEC can tackle these questions, observers say.
“This is a very reasonable course correction we're looking at,” Carter said.
Speaking to Hill earlier this month, Smith said that much of his actions so far has been to reach a “neutral position.”
“Step 1 is like canceling that damage,” Smith said. David Sax says that creating artificial intelligence (AI) and cryptospore locations that were met is “surprising.”
Sacks is one of several cryptography supporters that Trump chose to power. Others include SEC Chair candidate Paul Atkins and crypto enthusiast Secretary of Commerce Howard Lutnick.
These moves reinforce the tone of scaled back execution, but observers stressed that this should not be confused with accountability for an industry whose reputation has been shaking in recent years due to various scandals.
“There are still laws and I think many crypto people are surprised at how well the market is actually working orderly. [SEC] I expect to see that in a lot of enforcement actions, especially in the insider trading, because it has to be a judge,” Carter said.
There are subtle indications of a change in sentiment, aimed at launching the SEC's Cyber and Emerging Technology Unit (CETU), combating cyber-related fraud and protecting retail investors.
For the past three years, the group has been called “Cyber Units” and then went with “Crypto Assets and Cyber Unit” before getting a new name for “Cyber and Emerging Technology Units”, but the title did not mention Crypto.
“The message is that senior leaders who advise Donald Trump are talking about codes when they are operating within the Trump administration's framework. Then you won't knock on your door.” “Or if you're doing gross fraud against the public, you don't necessarily sleep soundly.”
Still, some skeptics interpret the move as a full groove in prosecution, especially in the wake of the final cycle of large campaign spending in the industry.
The SEC's firing for the Coinbase case faced a certain backlash.
The lawsuit filed by the SEC in June 2023 accused Coinbase of acting as an unregistered broker. The SEC claimed that Coinbase made billions without giving investors legal protection.
Coinbase was one of the leading corporate donors in the 2024 election cycle and threw its support and cash behind a candidate considered a strong supporter of the crypto.
The exchange has donated $705 million to Super PAC Fairshake over the 2023-2024 cycle. Andreessen Horowitz, a company of Crypto Firm Ripple and Venture Capital, handed out cash to various spending groups to increase candidates for crypto-oriented.
Now, critics are putting the industry's burgeoning campaign involvement in their final cycle under the microscope.
Cryptocurrency researcher and well-known crypto skeptic Molly White argued that the SEC's changing direction is “a goal of many election spending over the past few years.”
“I think political contributions were very directly related not only to the broad policy direction perspective, but also to the changing regulatory environment, in terms of repealing enforcement measures,” White told Hill.
Civics, a nonprofit consumer advocacy group, denounced Coinbase and the SEC last week, claiming that the industry's campaigns were “rewarded.”
“The SEC decision is also a key marker during the Trump administration's rush to waive prosecutions and enforcement actions against corporate criminals and misconduct,” wrote co-president Robert Weissman of the Civilians. “This is not abandonment of people who are already being wronged by corporate fraudsters, but an invitation to corporate crimes and corporate fraud epidemics.”
Carter pushed back, claiming that Fairshake's involvement was primarily in the race of Congress, not the administrative department.
“So it wasn't just an industry that abandoned Hale Mary to get Trump into office so he could change executives,” he said. “The fairshake strategy was actually legislative.”
Coinbase, along with other figures in the crypto world, brewed for years, vehemently rejecting criticism and pointing out his opposition to Gensler's probes. This included long before Trump publicly overturned his stance on Crypto in order to support the industry in the second half of 2023.
“If I'm generous and at worst defamatory, I feel these comments are misunderstood by information at best,” Coinbase Chief Legal Officer Paul Growal told Hill of the Backlash.
Grewal argued that some criticisms did not believe Trump was once a code critic and at some point called it a “fraud.”
Grewal pointed out how Congress moved key laws on market structure in 2023. This is an issue filled with bipartisan support. Financial innovation and technology in the 2023 21st Century Act received support from 71 Democrats in the House.
“The fact in question is that President Trump evolved and transformed in his view on cryptography. “In January 2024, we first began to get involved with him and his team, but what many critics wouldn't want to engage was against a much more subtle, complicated and complete history.”
Dan Gallagher, Robin Hood's Chief Freega Affairs Compliance and Corporate Affairs Officer, repeated this sentiment. I'm talking about the probe “He should have never been taken to his company.”
SEC, In a statement Coinbase's termination maintained that the decision did not reflect its position in other cases.
The regulator added that new cyber and emerging technology units will “eliminate those who are trying to misuse innovation to harm investors, such as frauds that include blockchain technology and crypto assets.”
Still, not all SECs are mounted in new directions. SEC Committee Member Caroline Crenshaw, Democrat; It is called Coinbase The “regulatory whiplash” dismisses it will lead to more confusion in a lengthy statement.
“This mid-stream reverse course, coupled with the prominent stays in other recent lawsuits — not only unprecedented, but also ignores 80 established laws,” she wrote. “I have heard many people say the industry is craving legal clarity, and today's actions are clear.
