The US Securities and Exchange Commission (SEC) said Tuesday that some past enforcement actions against cryptocurrency companies failed to deliver clear benefits to investors and may have misapplied federal securities laws.
In a separate statement outlining its 2025 enforcement results, the agency noted that since fiscal year 2022 it has brought 95 cases involving “books-and-records violations,” resulting in $2.3 billion in penalties.
“Together with seven crypto firm registration-related and six ‘definition of a dealer’ cases, these cases identified no direct investor harm from those violations, produced no investor benefit or protection.”
The SEC said the trend also revealed a “bias toward the volume of cases brought rather than investor protection,” along with a misallocation of resources and a misreading of federal securities laws.
The remarks highlight the regulator’s evolving enforcement approach under new leadership since Paul Atkins became SEC Chair in April 2025.
His predecessor, Gary Gensler, had faced criticism for relying on a “regulation-by-enforcement” strategy in dealing with the crypto industry. Since his exit, the agency has taken a more accommodating stance toward digital assets.
The SEC said it is now prioritizing quality over quantity. In the run-up to Donald Trump’s 2025 inauguration, the enforcement division undertook an “unprecedented rush” to file cases and pursued “aggressive” and novel legal theories, according to the agency.
Atkins said the SEC has since moved away from that approach, ending regulation by enforcement and refocusing on its core mission. The agency is now concentrating on cases that deliver meaningful investor protection and reinforce market integrity.
“We have redirected resources toward misconduct that causes the greatest harm—particularly fraud, market manipulation, and breaches of trust—and away from approaches that emphasized volume and record-setting penalties over genuine investor protection,” he said.
A November report by consulting firm Cornerstone Research found that under Atkins, enforcement actions against public companies, including those tied to crypto, fell by roughly 30% in fiscal 2025 compared with the previous year.
In its 2025 enforcement actions, the SEC said it secured orders totaling $17.9 billion in monetary relief, including $7.2 billion in civil penalties, with the remainder coming from disgorgement and prejudgment interest.
The agency added that these results underscore the shortcomings of prior actions and penalties, while redefining enforcement effectiveness in line with Congress’ original intent—focusing on cases that genuinely prevent investor harm rather than generating headlines or inflated figures.
Some crypto firms still face enforcement action
Despite the shift in approach, several crypto-related companies remained under scrutiny in 2025.
In May, Unicoin and four current and former executives were sued by the SEC for allegedly raising $100 million by misleading investors about certificates that supposedly granted rights to receive Unicoin tokens and stock. The company, however, has accused the regulator of misrepresenting its statements to build the case.
In April, the SEC also filed a civil complaint against Ramil Ventura Palafox, CEO of Praetorian Group International, accusing him of orchestrating a $200 million Ponzi scheme. A parallel criminal case brought by the US Department of Justice led to Palafox being sentenced to 20 years in prison in February.
