We have already written about steps taken by the U.S. Securities and Exchange Commission during the early days of the Trump administration to distinguish itself from the SEC under former chair Gary Gensler. See here. This post examines further evidence of that change.
Under Chairman Gensler’s leadership, the SEC took an assertive stance on cryptocurrency regulation. Gensler, who served as SEC Chair from 2021 to January 20, 2025, said that he was prioritizing investor protection and market integrity. Gensler’s SEC argued that many cryptocurrencies should be classified as securities, thereby subjecting them to the same regulatory requirements as traditional financial instruments. The SEC also initiated a series of high-profile enforcement actions against major cryptocurrency firms, including Coinbase, Binance, Kraken and Ripple Labs. While some firms settled these charges, others, such as Kraken, Ripple and Coinbase, chose to contest the SEC’s claims in court.
Chairman-nominee Paul Atkins (not yet confirmed) is expected to head the Trump-led SEC. He is a known advocate for a more lenient regulatory approach to cryptocurrencies. Along with Republican Commissioners Hester Peirce and Acting Chairman Mark Uyeda, Atkins has criticized Gensler’s handling of the cryptocurrency industry. They argue that the SEC’s current standards for determining whether a cryptocurrency qualifies as a security are overly stringent and stifle innovation. Consistent with those views, on the day after President Trump’s inauguration, Acting Chairman Uyeda launched a crypto task force (the “Task Force”), led by Commissioner Peirce, dedicated to developing a comprehensive and clear regulatory framework for crypto assets. The announcement of the Task Force stated that “the Task Force’s focus will be to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”
On February 11, 2025, the SEC and Binance asked the court for a 60-day stay in the SEC’s case against Binance, and its founder Changpeng Zhao. The SEC suggested the stay, and Binance agreed, due to the work of the Task Force, noting that “the work of this task force may impact and facilitate the potential resolution of this case.”
There is also an ongoing SEC case against Cumberland DRW LLC for allegedly operating as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities. The SEC recently requested the court to extend the deadline for the SEC to respond to Cumberland’s motion to dismiss. Again, the SEC stated that the recently launched Task Forced could facilitate a resolution of the matter.
In another lawsuit, this one against the SEC, there is an issue of whether a nascent cryptocurrency company called Lejilex could preemptively sue the SEC for a determination that its planned business would not offend securities laws. The SEC has requested to postpone oral arguments due to the launch of the Task Force.
Finally, we have reported about the lawsuit filed by Attorneys General from 18 States against the SEC. Their Complaint argues that the SEC’s policy of “treating secondary transactions in common digital assets as uniformly investment ‘contracts,’ and of treating platforms that facilitate such transactions as securities exchanges, broker-dealers, and clearing agencies subject to the registration requirements of the Securities and Exchange Acts,” exceeds the scope of the agency’s statutory authority and unlawfully wrests primary regulatory authority away from the States. On February 7, 2025, the SEC requested an extension of time to respond to the Complaint in that case.
The requests by the Trump-led SEC to pause many of the cryptocurrency cases brought under the Gensler-led SEC is further evidence of the significant shift in regulatory approach by the new SEC.
