Gary Gensler resigned from his position as SEC Chair on January 20, 2025. Paul Atkins took the chair on April 21, 2025, after Mark Uyeda served as Acting Chair from January 21 to April 21. Atkins, a former Commissioner from 2002 to 2008 and former CEO of Patomak Global Partners, replaced the previous administration’s aggressive stance toward digital assets. This leadership change immediately altered the direction of the agency.
The pivot happened.
The decline in enforcement actions
The statistics from 2025 demonstrate a significant shift in how the SEC handles digital assets. In 2025, the SEC initiated only 13 cryptocurrency-related actions, which marks a 60% decrease from the 33 actions brought in 2024. Monetary penalties against digital asset market participants totaled $142 million in 2025, a figure representing less than 3% of the penalties from 2024. Most of the 2025 enforcement activity occurred before Gensler left the agency. Specifically, 5 of the 13 actions involved cases brought under Gensler’s leadership. In contrast, the 8 actions initiated under Atkins all involved allegations of fraud. The agency’s total enforcement actions for FY 2025 reached 456, the lowest total in roughly 20 years.
I find the sudden drop in crypto-specific activity quite telling. The transition from Gensler to Atkins removed the primary driver of "regulation by enforcement" that defined the previous years. While the previous administration used investigative sweeps to target various market participants, the current leadership prefers focusing on cases involving "liars, cheats, and thieves." This change in philosophy directly correlates with the lower numbers in the crypto space.
Policy-driven case closures
The SEC began dismissing legacy litigation almost immediately after the administration changed. The agency dismissed its enforcement action against Coinbase with prejudice, a move aimed at reforming the regulatory approach to the crypto industry. Shortly after this dismissal, the Commission closed several investigations into Gemini, Uniswap Labs, and the NFT platform OpenSea. These closures occurred even though the agency had previously issued Wells notices to those entities. The agency also closed actions against other players like Crypto.com, Binance, Robinhood, and Ondo Finance throughout 2025.
The numbers don’t lie.
The dismissal of the Coinbase case signaled that the SEC would no longer pursue the same legal theories used by the previous leadership. Instead of focusing on whether tokens constitute unregistered securities, the current Commission prioritizes traditional fraud and market manipulation. I see this as a calculated retreat from the aggressive policing of the "Wild West" environment that Gensler frequently mentioned.
A new regulatory framework
On August 18, 2026, the SEC introduced Regulation Crypto Assets, a proposal that provides a tailored regime for certain investment contracts. This proposal serves as the centerpiece of Chairman Atkins’ "Project Crypto." It aims to provide crypto innovators with pathways to raise capital while maintaining investor protections. The framework relies on the Howey test but creates specific exemptions to accommodate the unique nature of blockchain technology.
The proposal targets "covered investment contracts," which include assets that are not themselves securities but are subject to an investment contract. The framework includes four main components: an investment contract safe harbor, a startup exemption, a fundraising exemption, and the preemption of state registration requirements. Once a network becomes functional and the issuer completes its promised development, the asset can exit securities regulation through the safe harbor.
| Feature | Startup Exemption | Fundraising Tier 1 | Fundraising Tier 2 |
|---|---|---|---|
| Maximum Raise | $5 million | $20 million | $75 million |
| Offering Period | 4 years | 12 months | 12 months |
| Financials | No financial statements | Principles-based narrative | Audited (per PCAOB/GAAS) |
| Issuer Type | Any entity/group | U.S. entity | U.S. entity |
| Resale | No restrictions | No restrictions | No restrictions |
| Regulatory Filing | Form NOR | Form 1-CRYPTO | Form 1-CRYPTO |
The mechanics of crypto exemptions
The startup exemption provides a one-time way for early-stage projects to raise funds. Issuers can raise up to $5 million over a four-year window by filing a notice of reliance on Form NOR. This exemption allows for a broad range of transactions, including airdrops, staking rewards, governance distributions, and gas fees. It does not require financial statements and allows for general solicitation.
The fundraising exemption offers a larger pathway for more established projects. It operates in two tiers, modeled after Regulation A. Tier 1 allows for up to $20 million in a 12-month period, while Tier 2 allows for up to $75 million. Both tiers require issuers to be U.S. entities and file offering statements on Form 1-CRYPTO. Unlike the startup exemption, Tier 2 requires audited financial statements. Both exemptions allow tokens to be traded without resale restrictions, and they both preempt state "blue sky" laws.
You should watch the November departure of Hester Peirce.
The enforcement division reorganization
The Enforcement Division underwent massive changes in 2025 and 2026. Judge Margaret Ryan resigned as Director on March 16, 2026, after serving only six months. David Woodcock took the role on May 4, 2026, after serving as Acting Director. Woodcock previously directed the Fort Worth Regional Office and worked as a partner in private practice. The agency also saw the appointment of Osman Nawaz as Deputy Director in July 2026.
The division faced significant staffing challenges during this period. The workforce fell by 15% compared to the previous administration. Hundreds of employees accepted voluntary resignation offers as part of the administration’s efforts to reduce the federal workforce. In April 2025, the SEC implemented a targeted reorganization to restructure management and reporting. This staffing downturn, combined with a focus on quality over quantity, contributed to the lower enforcement numbers. The division also established the SOX Group to focus on auditing standards following budget cuts to the PCAOB.
Updated cooperation and process rules
The SEC released a new Enforcement Manual on February 24, 2026, which provides the first comprehensive update since 2017. The new manual emphasizes that the SEC will review and refresh its processes annually. It places a heavy emphasis on how companies can receive cooperation credit. The new rules require companies to report misconduct to the SEC before the staff finds out through other sources.
The new enforcement manual, which the Division of Enforcement released on February 24, 2026, emphasizes that companies must proactively report misconduct to the SEC before the staff learns of it from other sources to receive any hope of cooperation credit. To get credit, companies must engage in effective self-policing, prompt self-reporting, and active cooperation. The SEC also created a new Cooperation Committee to approve all recommendations for deferred prosecution or immunity.
The rules also changed the Wells process. Staff must now provide greater access to the investigative file so recipients can respond to charges. Written submissions must stay under 40 pages, and video submissions must not exceed 12 minutes. Post-Wells meetings must occur within four weeks of the submission and require a senior official to attend.
A shrinking Commission
The Commission currently operates with only three members: Chairman Atkins, Commissioner Peirce, and Commissioner Uyeda. Commissioner Caroline Crenshaw departed in January 2026. Commissioner Peirce will leave the agency in November 2026 to join Regent University School of Law. This leaves the Commission with a single-party majority.
The Commission follows a quorum rule where three members usually constitute a quorum. However, if the number of commissioners falls below three, the members in office constitute a quorum. This means that if Peirce leaves, Atkins and Uyeda can still make decisions alone. They could approve settlements, rulemaking, or enforcement recommendations without any minority party input. This structure removes the bipartisan check that the original legislative design intended.
Will the two-member quorum hold when the next vacancy arrives?
The authority to remove commissioners
The legal ability of the President to control the SEC changed because of the Supreme Court. In the case of Trump v. Slaughter, the Court overruled nearly 90 years of precedence. The decision held that for-cause removal protections for commissioners of independent agencies violate the separation of powers. This ruling restores the President’s authority to remove commissioners at will.
This decision impacts the long-term stability of the Commission’s independence. While the SEC has traditionally taken pride in nonpartisan decisions, the removal of these protections means the President can exert more direct influence over the agency’s leadership. This power allows the administration to ensure the Commission follows the policy goals of the White House without the hurdle of independent commissioner protections. The legal battle over the removal of agency heads has now reached its conclusion, changing the power balance between the White House and the SEC.
