The US Securities and Exchange Commission (SEC) has sharply curtailed its enforcement activity against the digital asset industry, signaling a formal end to the "regulation by enforcement" era.
New data from Cornerstone Research reveals the agency initiated only 13 cryptocurrency-related enforcement actions in 2025, a 60% decline from 33 actions in 2024.
The figures represent the lowest annual total since 2017. Total monetary penalties also plummeted to $142mn, representing less than 3% of the fines imposed during the previous year. The shift marks a decisive pivot under Chair Paul Atkins, who took the helm following the departure of Gary Gensler in January 2025.
From enforcement to triageThe 2025 data underscores a fundamental change in the agency's internal priorities. While five of the year's cases were launched under Gensler's final weeks, the remaining eight under Atkins focused exclusively on fraud. This narrower scope indicates the SEC is moving away from the expansive interpretations of securities law—specifically the application of the Howey test to secondary markets—that characterized the previous administration.
The agency is also actively clearing its backlog. Seven cases were dismissed by the SEC during 2025, an unusually high volume of withdrawals that suggests a strategic "unwinding" of prior litigation. This includes the dismissal of cases against Coinbase and Binance, which Atkins signaled as a priority to "provide a firm regulatory foundation" for the industry.
Under Atkins, the SEC has replaced confrontation with definition. The agency has rebranded its Crypto Assets and Cyber Unit as the Cyber and Emerging Technologies Unit (CETU), refocusing its mission on combatting actual misconduct and cybersecurity fraud rather than the classification of tokens.
Jurisdictional lines blurThe enforcement retreat aligns with a broader legislative push in Washington to rebalance oversight between the SEC and the Commodity Futures Trading Commission (CFTC). Draft legislation from the Senate Agriculture Committee seeks to establish the CFTC as the primary regulator for spot markets in digital commodities, effectively limiting the SEC reach.
The era of jurisdictional "turf wars" appears to be ending. The SEC and CFTC are scheduled to hold a joint public event on 27 Jan titled “SEC-CFTC Harmonization: US Financial Leadership in the Crypto Era.” This follows a joint statement issued on 22 Jan by Atkins and CFTC Chair Michael Selig.
"For too long, market participants have been forced to navigate regulatory boundaries that are unclear in application and misaligned in design," Atkins said. While the SEC maintains that fraud remains a priority, the balance of power is shifting toward formal rulemaking and legislative settlement rather than courtroom battles.
