The SEC is maintaining roughly the same volume of cases under the Trump administration as it had previously, even as it pulls back on Biden-era actions targeting crypto and securities dealers and contends with potential personnel and funding cuts.
The Securities and Exchange Commission filed 44 enforcement actions from Inauguration Day to the end of June, compared with 48 filings over the same stretch last year, a Bloomberg Law review found.
“Everyone expected there to be a lot less SEC activity, because there’s been downsizing of government and a change in priorities,” said Mark Bini, a partner at Reed Smith LLP who represents companies in government investigations and litigation. “But I suspect that we are going to see a lot of these traditional heartland cases, because they’ve narrowed the focus.”
New federal lawsuits filed by the SEC in recent months largely reflect the Trump administration’s agenda focusing on investor harm, which Chairman Paul Atkins frames as a return to the agency’s roots. Those included cases targeting alleged real estate investment schemes and insider trading, among others falling under the umbrella of traditional fraud enforcement.
Atkins’ SEC voluntarily dropped a slew of crypto cases initiated by former Chair Gary Gensler, who frequently took flak for bringing enforcement actions that seemed designed to declare the agency had the power to regulate major players such as Coinbase Global Inc.
But even when it comes to digital assets, the SEC continues to pursue some crypto-related fraud cases, despite President Donald Trump’s full-throated backing of the industry.
“Investors that provide such capital must be able to continue to depend on effective enforcement against fraudulent activities,” Atkins said at a Senate hearing last month.
The SEC declined to comment.
‘Crypto-Adjacent’ Cases
SEC leaders under Trump also refashioned the agency’s crypto enforcement unit into a smaller cyber-focused outfit and held a series of roundtables aimed at welcoming digital asset industry players to shape regulation going forward.
But the choice to reverse course on many pending crypto cases from the Gensler era—intended to address concerns that Gensler’s SEC was engaging in “regulation by enforcement”—didn’t amount to a complete abandonment of all things crypto-related.
“Recent actions are almost crypto-adjacent in a way, garden variety fraud using crypto buzzwords, but the numbers are big and the extent of the consumer harm is large,” said Meghan Spillane, a partner at Goodwin Procter LLP who serves as co-chair of the firm’s digital currency and blockchain technology practice.
In May, for instance, the SEC alleged Unicoin Inc. and its top executives defrauded investors out of more than $100 million by telling them that rights certificates were safe investments in digital assets.
Unicoin CEO and Chairman Alex Konanykhin said he considers the case to be a holdover from the past administration.
“Our case is a legacy matter,” he said. “The only reason that they brought it was because they knew a new cryptocurrency case wouldn’t survive much past Inauguration Day.”
The agency also brought two separate actions in recent months against individual executives who allegedly touted crypto ventures to raise tens of millions from unwitting investors.
“They are going for clear violations and sending a clear message,” Spillane said.
Ponzi-like schemes, including those that involve crypto, are a persistent theme in enforcement across administrations that the SEC will likely continue pursuing under Atkins, according to Bini.
Meanwhile, the SEC continues to crack down on other traditional forms of fraud.
“They are making good on their promises,” Bini said. “We’ve seen them bring new actions for insider trading, accounting fraud, market manipulation cases in the penny stock world.”
Rules of the Road
Enforcement is just one of the avenues the SEC is using to telegraph its regulatory priorities to Wall Street. Public statements and other forms of guidance are also setting guardrails for industry players looking to steer clear of agency scrutiny.
The SEC’s division of corporation finance issued one such statement last week to clarify disclosure requirements for crypto exchange-traded products, calling on issuers to use plain language to describe custody arrangements and risks associated with the increasingly popular investment vehicles. The agency under Atkins also put out statements to address crypto staking and other gray areas of digital asset regulation.
“Guidance gives you at least some of the broad lines where you’re okay to play, and then legislation and a little bit more analysis is going to broaden where those lines are, and I think that’s incredibly helpful,” said Grant Fondo, a partner at Goodwin who also co-chairs the digital asset and blockchain practice with Spillane.
Putting the Trump administration’s agenda into practice via enforcement and guidance may be the SEC’s strategy for now. But formal industrywide rulemaking and legislation will be needed to cement the changes Atkins hopes to enact, according to Spillane.
A crypto market structure bill, the “CLARITY Act” (H.R. 3633), is slated for a vote in the House the week of July 14. House lawmakers are also weighing changes to stablecoin legislation, the “GENIUS Act” (S. 1582), that the Senate passed last month.
“The legislative piece is essential,” Spillane said said. “Getting smart legislation that really develops clear rules of the road is the way that something actually sticks and provides long-term certainty, rather than just capitalizing on the fervor of a very crypto-friendly administration.”
