SEC says some of its past crypto enforcement cases misinterpreted securities laws

The U.S. Securities and Exchange Commission has recently said that several past enforcement actions against crypto firms failed to deliver investor benefits and misinterpreted securities laws.

In a statement outlining its 2025 enforcement results, the SEC said that since fiscal year 2022, it had pursued 95 cases tied to “book-and-record 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,” it added.

According to the SEC, the agency’s previous approach reflected a “bias for volume of cases brought versus matters of investor protection,” along with a misallocation of resources and a misinterpretation of federal securities laws.

However, the agency’s approach changed following the appointment of Paul Atkins in April 2025. The SEC has moved away from the enforcement-heavy stance associated with former Chair Gary Gensler, which had drawn criticism from parts of the crypto industry.

In the run-up to Donald Trump’s 2025 inauguration, the enforcement division pushed through what the SEC described as an “unprecedented rush” of cases, often relying on “aggressive pursuit of novel legal theories.”

“We have redirected resources toward the types of misconduct that inflict the greatest harm, particularly fraud, market manipulation, and abuses of trust, and away from approaches that prioritized volume and record-setting penalties over true investor protection,” Atkins said.

Figures from Cornerstone Research showed enforcement actions against public companies, including crypto-related cases, fell by about 30% in fiscal 2025 compared with the previous year.

Even with fewer cases, the SEC reported $17.9 billion in monetary relief tied to 2025 actions, including $7.2 billion in civil penalties, with the remainder coming from disgorgement and prejudgment interest.

The agency said the latest results “re-establish the definition and measure of enforcement effectiveness,” focusing on actions that prevent investor harm rather than generating large penalty totals.

The SEC has continued to pursue multiple crypto companies throughout 2025.

In May, the SEC sued Unicoin and four current and former executives, accusing them of raising $100 million by misleading investors about certificates tied to future token and equity rights. The company has disputed the allegations, arguing that the regulator mischaracterized its statements.

Separately, the agency filed a civil complaint against Ramil Ventura Palafox in April, alleging he orchestrated a $200 million Ponzi scheme through Praetorian Group International.