One year after Gary Gensler's departure on January 20, 2025, the Securities and Exchange Commission's (SEC) approach to cryptocurrency regulation has undergone a noticeable transformation. Gensler's tenure, which began in April 2021, was characterized by an assertive enforcement strategy towards the crypto industry, but the agency has since adopted a more structured, rule-based framework.
Under Gensler, the SEC pursued numerous enforcement actions against major crypto exchanges like Binance and Coinbase, expanding the definition of securities to include specific digital assets. This "regulation by enforcement" approach, as it was often called, aimed to apply traditional securities laws to the crypto market, which Gensler viewed as "rife with fraud, scams, and abuse". He insisted that most crypto tokens are securities and should be regulated by the SEC in line with standards applied to traditional finance. The SEC initiated over 100 enforcement actions through 2023. By the end of Gensler's administration in 2024, the SEC had brought 125 cryptocurrency-related enforcement actions, compared to 70 under his predecessor, Jay Clayton. Monetary penalties imposed under Gensler reached $6.05 billion, nearly four times the $1.52 billion under Clayton.
However, this enforcement-heavy strategy faced criticism for creating regulatory ambiguity, disrupting markets, and eroding investor confidence. Classifying specific crypto assets as securities without providing a clear framework fostered confusion and was seen as counterproductive. The Blockchain Association, in partnership with HarrisX, released data indicating that the U.S. digital asset industry spent over $400 million defending itself against the SEC under Gensler's leadership.
Following Gensler's exit, the SEC shifted towards a more balanced approach under the guidance of Paul Atkins, who was appointed in early 2025. The agency began prioritizing traditional securities fraud over novel liability theories. In 2025, enforcement actions dropped significantly, and several high-profile investigations were dismissed. By 2025, enforcement actions had dropped to 313. Total monetary settlements fell 45%. The SEC also implemented procedural reforms, including expanded transparency in the Wells process and the creation of the Crypto Task Force and Cyber and Emerging Technologies Unit (CETU), emphasizing rulemaking over enforcement. The Crypto Assets and Cyber Unit was dismantled, and replaced with a Cyber and Emerging Technologies Unit. The new unit will focus on cybersecurity-related fraud, AI scams, and retail investor protections.
This shift has had a measurable impact on market integrity. The SEC's new approach aims to balance investor protection with fostering innovation in the digital asset space. By clarifying the legal status of crypto, the SEC has contributed to market stabilization. The shift toward structured frameworks has laid the groundwork for sustained growth.
Despite these positive developments, challenges remain. These include stablecoin oversight and divergent interpretations of the EU's Markets in Crypto-Assets (MiCA) regulation. The SEC's focus on traditional fraud has faced criticism for potentially creating loopholes.
Overall, the SEC's crypto playbook looks significantly different one year after Gary Gensler's departure. The agency's strategic reorientation towards a rule-based regulatory framework has reshaped the digital asset landscape, fostering a more stable and innovative environment. While challenges persist, the shift represents a significant step towards integrating crypto into mainstream finance.
