In 2025, the U.S. Securities and Exchange Commission marked a decisive shift away from its long-criticised approach of “regulation by enforcement,” opting instead for structured rulemaking and strategic restraint aimed at balancing innovation with market integrity.
Under new leadership, the agency has moved to replace reactive litigation with clearer regulatory guidance, particularly across digital assets and emerging financial technologies. The change has been welcomed by market participants who for years complained of uncertainty created by enforcement-led oversight.
One of the most visible changes came in January with the formation of a dedicated Crypto Task Force, led by Commissioner Hester Peirce. The unit was created to design a comprehensive framework for digital assets, addressing long-standing questions around classification, custody and market access.
The SEC has also dropped or settled several high-profile enforcement actions initiated under the previous administration. Cases involving Ripple, Coinbase and Kraken were either dismissed or resolved, reinforcing the agency’s preference for forward-looking guidance over courtroom battles.
In another notable reversal, the commission rescinded Staff Accounting Bulletin 121, a rule that had effectively discouraged banks from offering crypto custody services by forcing them to treat client-held digital assets as balance-sheet liabilities. Its withdrawal is seen as a significant step toward integrating crypto services into the traditional banking system.
Rather than pursuing piecemeal enforcement, the SEC is now advancing formal rule proposals to bring digital assets within existing market structures. These include frameworks for crypto custody, amendments that could allow certain digital assets to trade on national securities exchanges, and updates to transfer agent rules to accommodate distributed ledger technology.
Together, these initiatives signal an effort to modernise securities regulation without stifling innovation, a sharp contrast to the more confrontational stance of previous years.
New guidance issued in 2025 has begun to draw clearer lines around token classification. The SEC indicated that some protocol staking activities, dollar-backed stablecoins and even meme coins may fall outside the scope of federal securities laws, depending on their structure and use.
In September, the Securities and Exchange Commission and the Commodity Futures Trading Commission issued a rare joint statement expressing openness to “innovation exemptions” and potential safe harbours for decentralised finance platforms and peer-to-peer trading models. The move suggests growing inter-agency coordination on assets that sit at the boundary between securities and commodities regulation.
Institutional participation has also been addressed. The SEC approved in-kind creations and redemptions for crypto exchange-traded products, a change expected to lower transaction costs and reduce price slippage for large investors.
Officials say the broader goal is to improve market efficiency while maintaining investor protections, a balance the agency believes was missing under a purely enforcement-driven regime.
While critics caution that lighter enforcement could invite abuse, supporters argue the SEC’s recalibrated approach provides long-needed clarity. By emphasising rulemaking, coordination with other regulators and targeted oversight, the commission appears intent on shaping markets rather than chasing them.
As active proposals move through the SEC’s regulatory agenda, 2025 may be remembered as the year the agency redefined how financial innovation is governed in the United States.
