SEC under Trump could freeze crypto cases not involving fraud: Report

Once the US Securities and Exchange Commission is under new management in 2025, it could reportedly consider dropping certain crypto enforcement cases.

According to a Jan. 15 Reuters report citing “people briefed on the matter,” the SEC may review its existing court cases against crypto firms in the first few days after US President-elect Donald Trump’s inauguration.

The report suggests the commission could freeze litigation that does not involve fraud allegations, hinting at cases alleging securities law violations only. 

After Jan. 20 and the resignations of SEC Chair Gary Gensler and Commissioner Jaime Lizárraga, there will likely be only three members of the financial regulator until Trump officially nominates replacements. The report suggests that SEC Commissioners Hester Peirce and Mark Uyeda — both Republicans, like Trump — could review the regulator’s rules on what constitutes a security and ongoing court cases with crypto firms.

Former SEC Chair Jay Clayton was the head of the agency in 2020 when it filed a civil case against Ripple Labs, alleging the firm used the XRP (XRP) token as an unregistered security to raise funds.

Under Gensler, the SEC has brought other lawsuits against US-based companies, including Coinbase, Binance, Celsius, BlockFi, and Consensys.

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Though some crypto firms have settled charges with the SEC or paid fines after going through courts, others continue to file appeals challenging decisions. The SEC is expected to file an opening brief on Jan. 15 as part of the commission’s appeal of a judgment against Ripple, while a judge stayed the regulator’s case against Coinbase until an appellate court ruled on an interlocutory appeal.

What will the SEC look like in 2025?

Caroline Crenshaw, a Democratic SEC commissioner who took office in 2020, will likely be allowed to serve at the agency until the end of 2025. In December, Democratic senators attempted to confirm her nomination to another five-year term while they had majority control of the chamber but were reportedly blocked by Republican lawmakers.

Removing Gensler was one of Trump’s promises to the crypto industry during his presidential campaign.

After winning the election against Democratic Vice President Kamala Harris, he announced the appointment of an AI and crypto czar and a potential replacement for the SEC chair.

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