SEC Chairman Atkins’ Crypto Reset: What Changed for Digital Assets in 2025

The Securities and Exchange Commission’s approach to cryptocurrency regulation underwent a dramatic transformation in 2025. Under Chairman Paul Atkins, the agency shifted from aggressive enforcement to a framework emphasizing regulatory clarity and industry engagement. For crypto founders, compliance officers, and legal practitioners, understanding what changed—and what remains unchanged—is essential for navigating 2026.

Key Takeaways

• Enforcement declined significantly: SEC crypto enforcement actions dropped 27% in 2025, with total settlements declining 45% to $808 million.
• Major litigation resolved: The SEC dismissed or settled high-profile cases against Coinbase, Binance, and Gemini, signaling a retreat from “regulation by enforcement.”
• New institutional framework: The SEC Crypto Task Force, launched in January 2025, is developing registration pathways and token classification guidance.
• Underlying law unchanged: The Securities Act of 1933, Securities Exchange Act of 1934, and Howey test remain in full effect—only enforcement priorities have shifted.
• Legislative progress: The CLARITY Act passed the House in December 2025 but remains pending in the Senate, leaving statutory gaps unresolved.

What Changed in SEC Crypto Enforcement in 2025?

The transformation in SEC crypto enforcement in 2025 reflects a deliberate policy choice by new leadership, not a change in underlying law. Understanding this distinction is critical for compliance planning.

The Gensler Era: Enforcement as Primary Tool (2021-2024)

Under former Chairman Gary Gensler, the SEC pursued what industry critics termed “regulation by enforcement.” The agency’s position, articulated in numerous public statements, was that most crypto tokens constitute securities under SEC v. W.J. Howey Co., 328 U.S. 293 (1946). Key enforcement actions during this period included:

• Coinbase: SEC v. Coinbase, Inc., No. 1:23-cv-04738 (S.D.N.Y. filed June 6, 2023), alleging the exchange operated as an unregistered securities exchange and broker.
• Binance: SEC v. Binance Holdings Ltd., No. 1:23-cv-01599 (D.D.C. filed June 5, 2023), alleging unregistered offerings and exchange operations.
• Ripple: SEC v. Ripple Labs, Inc., No. 1:20-cv-10832 (S.D.N.Y.), resulting in a July 2023 ruling that secondary XRP sales on exchanges did not constitute securities transactions—a partial industry victory. See SEC v. Ripple Labs, 2023 WL 4507900 (S.D.N.Y. July 13, 2023).
• Kraken: $30 million settlement in February 2023 over staking-as-a-service offerings.

Total SEC enforcement settlements in cryptocurrency matters exceeded $1.4 billion in 2024, according to SEC fiscal year reports.

The Atkins Reset: Clarity Over Litigation (2025-Present)

Chairman Atkins’ leadership brought measurable changes to enforcement priorities:

1. Resolution of Major Cases

The SEC voluntarily dismissed or favorably settled its highest-profile exchange cases:

• The Coinbase litigation was dismissed in early 2025, with the SEC indicating it would pursue regulatory clarity through rulemaking.
• The Binance.US-related claims were resolved through settlement in spring 2025.
• The Gemini matter was similarly resolved without an adverse judgment against the exchange.

Important note: These dismissals and settlements were procedural resolutions—they do not constitute judicial holdings that exchange-listed tokens are not securities. The underlying legal questions remain open.

2. SEC Crypto Task Force

In January 2025, the SEC announced the formation of the Crypto Task Force, placing Commissioner Hester Peirce in a leadership role. According to the SEC’s public announcements, the Task Force is charged with:

• Developing workable registration frameworks for digital asset securities under Section 5 of the Securities Act (15 U.S.C. § 77e)
• Providing interpretive guidance on when tokens satisfy the “investment contract” definition under Section 2(a)(1) of the Securities Act (15 U.S.C. § 77b(a)(1))
• Exploring conditional exemptions or “safe harbors” for emerging projects
• Coordinating with the CFTC to clarify jurisdictional boundaries between securities and commodities

The Task Force has issued requests for public comment but has not yet completed formal rulemaking.

3. Enforcement Statistics

SEC crypto enforcement metrics for 2025 reflect the policy shift:

• Total crypto-related enforcement actions declined approximately 27% year-over-year
• Settlement amounts dropped approximately 45% to $808 million
• Enforcement focus shifted toward clear fraud cases and away from regulatory classification disputes

The SEC has not abandoned investor protection—Ponzi schemes, rug pulls, and material misrepresentations continue to draw enforcement attention.

What Has NOT Changed: The Statutory Framework Remains Intact

The policy shift must not be confused with a change in law. The following legal requirements remain fully operative:

Securities Act of 1933 (15 U.S.C. § 77a et seq.)

Section 5 continues to require registration of any “offer or sale” of a “security” unless a valid exemption applies. Unregistered offerings remain unlawful, regardless of enforcement priorities.

Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.)

Entities functioning as exchanges, broker-dealers, or clearing agencies for securities must register under Sections 5, 15, and 17A, respectively. The SEC’s decision not to sue does not create a registration exemption.

The Howey Test

The Supreme Court’s test from SEC v. W.J. Howey Co., 328 U.S. 293, 301 (1946), remains binding precedent. A transaction constitutes an “investment contract” (and thus a security) if it involves:

1. An investment of money
2. In a common enterprise
3. With a reasonable expectation of profits
4. Derived from the efforts of others

Courts continue to apply this test. The SEC’s enforcement discretion does not modify judicial interpretation of what constitutes a security.

Reves Test for Notes

For debt-like instruments, courts apply the “family resemblance” test from Reves v. Ernst & Young, 494 U.S. 56 (1990). Lending protocols and yield-bearing products should analyze this framework independently of Howey.

How Is the Task Force Approaching Token Classification?

While no formal rulemaking has been completed, the Crypto Task Force has signaled through public statements and comment requests that it is examining several factors:

Functional Utility: Tokens with genuine consumptive uses—where purchasers acquire tokens primarily to use a network’s services rather than for investment—may receive more favorable treatment. This analysis echoes the “Howey in the Hills” framework discussed in Commissioner Peirce’s 2020 safe harbor proposal.

Decentralization: Projects where control is sufficiently distributed may argue the “efforts of others” prong is not satisfied because no central promoter drives the token’s value. This concept traces to then-Director William Hinman’s June 2018 speech regarding Ethereum, though that speech was explicitly not official SEC guidance.

Secondary Market Analysis: The Task Force appears to be examining whether secondary market transactions should be analyzed differently than initial distributions—consistent with certain reasoning in the Ripple decision regarding programmatic sales.

Caution: These signals do not constitute law or even formal guidance. Companies structuring around these concepts assume regulatory risk until formal rules are adopted.

Legislative Developments: The CLARITY Act

Congress has advanced legislation that could provide statutory clarity. The CLARITY Act (Crypto Legal And Regulatory Integrity Through Yield Act) passed the House of Representatives in December 2025 and is pending before the Senate Banking Committee. Key provisions include:

• CFTC jurisdiction over “digital commodities” meeting specified criteria, creating a clearer alternative to SEC oversight for certain tokens
• Decentralization exemption: Registration exemptions for tokens achieving “sufficient decentralization” based on objective criteria
• Joint rulemaking mandate: Required SEC-CFTC coordination on jurisdictional boundaries within 18 months of enactment
• Secondary market safe harbor: Protections for secondary trading of tokens that were initially offered in compliance with securities laws

Current status: The bill has not been enacted. Senate passage is uncertain. Companies cannot rely on the CLARITY Act for current compliance planning, but should monitor its progress and prepare to adapt if it becomes law.

What to Do Now: Actionable Steps for 2026

Given the current enforcement environment, practitioners and companies should take the following steps:

1. Conduct a Fresh Compliance Assessment

Review all token offerings, exchange listings, and DeFi protocol structures against existing securities law requirements. Document whether each token would satisfy or fail each Howey prong. The enforcement pause does not eliminate legal exposure—it merely reduces the probability of near-term SEC action.

2. Prepare Contemporaneous Legal Analysis

For any token issuance or listing, prepare a legal memorandum analyzing securities law classification at the time of the transaction. This documentation demonstrates good faith and may be critical in future enforcement, litigation, or M&A due diligence.

3. Engage With the Regulatory Process

The Crypto Task Force has solicited public input. Industry participation in comment periods influences rulemaking outcomes. Companies with novel structures or compliance challenges should consider submitting comments or requesting no-action guidance.

4. Address Tax Compliance Separately

Form 1099-DA reporting obligations begin for 2025 transactions. Exchanges must report, and investors must track wallet-by-wallet cost basis per IRS guidance in Notice 2024-28. Tax compliance is entirely separate from securities analysis and requires independent attention.

5. Build Scalable Compliance Infrastructure

Enforcement priorities can shift with new leadership. The next SEC Chairman—potentially in 2029—could return to aggressive enforcement. Companies should build compliance systems that can scale up quickly rather than assuming the current environment will persist indefinitely.

6. Monitor State-Level Activity

State securities regulators and attorneys general have independent authority to bring enforcement actions. New York (Martin Act), Texas, and other states have actively pursued crypto enforcement. Federal enforcement decline does not preclude state action.

Practical Implications by Stakeholder

Token Issuers

The reduced federal enforcement environment provides operational flexibility but not legal certainty. Issuers should still consider established exemptions:

• Regulation D (17 CFR § 230.501-508): Private placements to accredited investors
• Regulation A+ (17 CFR § 230.251-263): Mini-IPO framework for offerings up to $75 million
• Regulation Crowdfunding (17 CFR § 227): Offerings up to $5 million through registered platforms
• Regulation S (17 CFR § 230.901-905): Offshore offerings excluding U.S. persons

Exchanges and Trading Platforms

The Coinbase dismissal removed immediate litigation pressure, but exchanges remain exposed to liability for listing unregistered securities. No formal safe harbor exists for exchange listings. Robust legal review of each listed token remains essential.

DeFi Protocols

The SEC has not provided formal guidance on how securities laws apply to decentralized protocols. Key questions remain open: Who is the “issuer” of a governance token? When does providing liquidity constitute brokerage activity? Protocol developers should document decentralization measures and analyze whether any aspect of operations could trigger registration requirements.

Institutional Investors

Compliance and investment committees should note that the legal status of most tokens remains formally unresolved. Investment policies requiring regulatory clarity may need revision to accommodate the current ambiguous environment.

Legal Practitioners

Client advice must distinguish between what the law requires (unchanged) and what the SEC is currently prioritizing (shifted). Opinions should be drafted to survive a potential enforcement environment change.

Looking Ahead: What to Watch in 2026

Several developments will shape the crypto regulatory landscape in the coming months:

• Task Force rulemaking: Any proposed or final rules from the SEC Crypto Task Force will materially affect compliance obligations.
• CLARITY Act progress: Senate action could provide statutory clarity—or the bill could stall, leaving the current ambiguous framework in place.
• Judicial decisions: Ongoing litigation in other cases will continue to refine Howey test application to digital assets.
• CFTC coordination: Joint SEC-CFTC efforts to clarify jurisdictional boundaries could reduce regulatory overlap.
• State enforcement: Monitor state-level activity that may fill gaps left by federal enforcement decline.

Conclusion

SEC crypto enforcement in 2025 declined meaningfully under Chairman Atkins, representing a genuine shift toward regulatory clarity over litigation. However, the underlying securities laws—the Securities Act, the Exchange Act, and the Howey test—remain unchanged and enforceable. The current environment represents a window for constructive industry engagement with regulators, not a permanent opening to unregulated activity.

Companies and practitioners should use this period strategically: strengthen compliance infrastructure, engage with the Task Force rulemaking process, document legal analysis contemporaneously, and prepare for multiple regulatory futures. The legal landscape for digital assets remains in transition, and the most resilient market participants will be those positioned to succeed regardless of which direction enforcement policy moves.

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This article is for informational and educational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. Laws and regulations in the cryptocurrency space change rapidly—consult a qualified attorney for advice specific to your situation and jurisdiction. Seth Goettelman is licensed to practice law in Wisconsin and Florida.