SEC's Crypto Enforcement Actions Decline Under Former Chair Gensler

According to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) experienced a 30% decrease in crypto-related enforcement actions during the last year under former Chair Gary Gensler. The agency initiated 33 actions in its final year under Gensler, compared to 47 actions in the previous year, which marked its peak enforcement period, as reported by Cornerstone Research on January 23. In the past year, the SEC charged a total of 90 defendants or respondents in crypto enforcement actions, comprising 57 individuals and 33 firms. There was a significant reduction in administrative proceedings, which decreased by over 50%. Despite this, monetary penalties imposed on crypto industry participants reached a record high of nearly $5 billion in 2024, largely due to the SEC's $4.5 billion settlement with Terraform Labs. Gensler, appointed by President Joe Biden in 2021, stepped down as SEC chair on January 20, coinciding with Donald Trump's entry into the White House. Cornerstone Research noted that over half of the SEC's enforcement actions in 2024 occurred in September and October, with only four actions initiated after the U.S. elections in November. Fraud was the most frequent allegation in the SEC's crypto litigation, cited in 73% of cases. Accusations of unregistered securities offerings followed at 58%. The regulator also increased charges related to market manipulation and failures to register as broker-dealers. Under Gensler's leadership, the SEC initiated nearly 80% more crypto-related enforcement actions compared to the tenure of Jay Clayton, who chaired the SEC from 2017 to 2020. Since 2013, the SEC has brought 207 crypto enforcement actions, with 47% related to initial coin offerings and non-fungible tokens. Under the new acting chair, Mark Uyeda, appointed by Trump, the SEC has already shifted its priorities. On January 23, the SEC canceled Staff Accounting Bulletin 121, a controversial rule that required banks and finance firms holding crypto to record them as liabilities on their balance sheets.