60% fewer enforcement cases, high-profile dismissals, and a reorganized enforcement apparatus defined the SEC’s crypto posture in the year after President Trump returned to office. The agency’s stance effectively moved from broad, aggressive ICO policing to a 2025 model centered on narrower fraud actions and a heavier reliance on structured rulemaking.
That recalibration matters because it changes how exchanges and token projects price legal and operational risk. In this environment, the market is increasingly tracking administrative rulemaking for clarity rather than waiting for court outcomes to set the tone.
From ICO Crackdowns to a Leaner Docket
Between January 2017 and January 2018, the SEC pursued an assertive line by applying the Howey Test to many ICOs and expanding its investigative infrastructure. The creation of the Cyber Unit in September 2017 helped centralize fraud and cyber-related investigations and reinforced the Commission’s jurisdictional baseline for digital-asset enforcement.
By contrast, coverage spanning January 2025 to January 2026 described a sharp pullback in case volume, including a reported 60% drop in crypto enforcement actions in 2025 versus the prior year. The dismissal of a major case against Coinbase on February 20, 2025, and the dropping of a separate action involving Gemini, signaled a more discretionary strategy focused on fraud and remediation rather than maximal litigation.
The overall pattern was less “enforcement-by-volume” and more “enforcement-by-selection,” with headline cases stepping aside as broader reforms took priority. The shift reads as a deliberate reset of how the SEC allocates enforcement capacity across crypto-specific risk areas.
Rewiring the Enforcement and Rulemaking Engine
The SEC also adjusted its internal operating model, rebranding the Cyber Unit as the Cyber and Emerging Technologies Unit in February 2025 to reflect a broader remit. At the same time, the creation of a dedicated Crypto Task Force led by Commissioner Hester Peirce formalized a rulemaking-led approach across asset classification, tokenization mechanics, and custody standards such as the “Know Your Custodian” initiative.
The task force was described as issuing granular operational guidance, including listing and market-making considerations for specific token types. That kind of specificity shifts the compliance conversation from courtroom positioning to product design, market structure decisions, and custody implementation details.
Presidential direction was also more explicit in the 2025 policy backdrop, including an executive order dated January 23, 2025 titled to strengthen American leadership in digital financial technology. Related initiatives cited alongside the pivot, including a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, were framed as supporting a pro-innovation stance and closer coordination with the CFTC.
Taken together, the timeline is clear in the text: 2017–2018 established a tough ICO enforcement baseline, while 2025 emphasized fewer cases, restructured units, and a task-force-driven rulemaking agenda. This is less a single policy announcement and more a coordinated shift in institutional posture and operating priorities.
For market participants, the operational takeaway is straightforward: litigation pressure eased in some areas, but uncertainty migrated to the rulemaking track. Less enforcement-by-litigation can reduce immediate legal tail risk, but formal rules can create a new compliance horizon that reshapes product design and custody models.
Investors and trading desks are now watching the Crypto Task Force’s rulemaking agenda and inter-agency coordination to judge whether this reform-oriented approach persists. The durability of this discretionary posture, versus a reversion to litigation-driven enforcement, will set the forward risk map for exchanges, issuers, and institutional allocators.
