Updates on Cryptocurrency Enforcement in 2025 - Key SEC Developments
The cryptocurrency industry in the United States has undergone significant regulatory shifts in 2025, driven by a new presidential administration, leadership changes at key agencies, and evolving policy priorities. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the primary federal regulators overseeing digital assets, have adjusted their enforcement approaches and regulatory philosophies.
Key SEC Developments
Crypto Task Force Formation: In January 2025, a Crypto Task Force led by Commissioner Hester Peirce was formed to develop a comprehensive regulatory framework. The task force aims to clarify asset classifications, streamline registration processes, and provide sensible disclosure guidelines, moving away from enforcement-driven enforcement approach. It has hosted a number of roundtables and discussions to engage industry stakeholders.
In a March 2025 statement, the SEC’s Division of Corporation Finance mentioned that meme coins may not meet the Howey test, and therefore may not be subject to the securities regulation unless they are tied to an investment enterprise. The Division defined meme coins as crypto assets inspired by internet memes, characters, current events, or trends, promoted to attract enthusiastic online communities for trading. Meme coins are typically purchased for entertainment, social interaction, or cultural purposes, with value driven by market demand and speculation, akin to collectibles. They generally have limited or no practical use, are highly volatile, and are often accompanied by risk disclaimers. The Division considers the meme coins as described above to be not financial instruments and do not meet the Howey test.
In another statement issued in April 4, 2025, the Division of Corporation Finance at the SEC provided guidance on the application of federal securities laws to stablecoins. The Division defines stablecoins as crypto assets designed to maintain a stable value in relation to a reference asset such as the US dollar. Stablecoins generally are designed to track the value of the reference asset on a one-for-one basis. The Division is of the view that the offer and sale of the above-mentioned type of stablecoins do not involve the offer and sale of securities pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934.
Pause in High-Profile Cases: The SEC has paused or withdrawn several enforcement actions, most notably dismissing its case against Coinbase in February 2025, which alleged unregistered securities operations. Similar closures of investigations into other crypto firms suggest a pivoted approach to future enforcement.
New Enforcement Focus: The SEC is signaling a more selective approach to future enforcement. Instead of focusing on broad federal securities registration violations, the enforcement will be more emphasized on fraud and misconduct. However, it is noteworthy that despite the new development of the SEC’s enforcement approach, plaintiffs may still seek relief through state business and consumer protection acts, and common law tort doctrines such as fraud and misrepresentation (Omar Hurlock v. Kelsier Ventures, Meteora, KIP Protocol, et al).