**SEC’s Evolving Approach to Crypto Regulation: From Enforcement to Innovation**
Enforcement and crackdowns have long characterized the U.S. Securities and Exchange Commission’s (SEC) stance on cryptocurrencies and other digital assets. After years of standoffs, the agency’s new willingness to engage with the crypto industry could mark the start of a genuine experiment in regulatory change.
### A New Priority: Crypto and Tokenization
SEC Chair Paul Atkins has designated crypto and tokenization as the agency’s “job one” priority, signaling a shift toward a pro-innovation stance. This marks a departure from the agency’s previous approach under former Chair Gary Gensler, who primarily relied on enforcement actions. Under Atkins, the SEC appears to be asking a different question: how to let innovation thrive while maintaining effective oversight.
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### Gensler-Led SEC: Enforcement as Policy
Gary Gensler treated most cryptocurrencies as “securities” and centered his regulatory strategy on aggressive enforcement and litigation. During his tenure, the SEC filed over 125 crypto-related enforcement actions, achieving substantial monetary settlements.
– Approximately 64% of these actions alleged unregistered securities offerings rather than fraud.
– About 37% of these actions were unanimously approved by the SEC Commissioners.
Between late 2020 and 2024, the SEC initiated lawsuits against several high-profile crypto firms, including Ripple (December 2020), Bittrex (April 2023), Coinbase (June 2023), Binance (June 2023), and Kraken (November 2023). These lawsuits primarily alleged violations such as unregistered securities offerings and operating unlicensed exchanges.
Ripple’s Chief Legal Officer, Stuart Alderoty, criticized Gensler’s approach, asserting that he “prejudged crypto” and pursued lawsuits against firms “without investigation,” which stifled the industry’s growth in the U.S.
The enforcement-heavy environment prompted some crypto businesses to exit the market. Even firms registered with the SEC faced challenges staying afloat under such strict regulations.
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### Atkins-Led SEC: Innovation as Strategy
Following Gensler’s departure in January 2025, Acting Chairman Mark T. Uyeda announced the creation of the Crypto Task Force led by Commissioner Hester Peirce. This task force aimed to adopt a more balanced approach to cryptocurrency and digital assets, moving beyond a sole focus on enforcement.
A significant policy shift occurred in January 2025 when the SEC rescinded Staff Accounting Bulletin (SAB) 121. This move eased barriers for financial institutions offering crypto custodial services.
Since taking office in April 2025, Chair Paul Atkins has guided the SEC toward withdrawing or pausing select crypto lawsuits. In July 2025, the agency launched Project Crypto, an initiative aimed at “modernizing the securities rules and regulations” to enable U.S. financial markets to operate on-chain.
At DC Fintech Week on October 15, Atkins emphasized the goal of building a future-proof crypto framework “to actually attract people back into the United States who may have fled.” By jokingly dubbing the SEC a “Securities and Innovation Commission” during the Forum, he signaled the agency’s innovation-friendly agenda.
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### Looking Ahead
Ultimately, the SEC under Atkins plans to initiate rulemaking around its “innovation exemption” vision by the end of 2025 or early 2026, depending on developments related to the ongoing U.S. government shutdown. This evolving approach suggests a new era where regulation and innovation might coexist more harmoniously in the crypto landscape.
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