SEC Drops 60% of Crypto Cases: Giants Win; Internal Dissent

• The SEC has quietly dismissed 60% of crypto enforcement actions inherited from the previous regime, specifically targeting cases against industry giants like Binance, Ripple, and Gemini.
• Internal Dissent: Former SEC trial counsel Christopher Martin slammed it as a ‘complete surrender,’ arguing that the agency’s retreat throws retail investors “to the wolves” in favor of political expediency.
• The agency continues to prosecute smaller entities like Unicoin Inc., effectively creating a two-tier market favoring incumbents ahead of the Clarity Act legislation.

The U.S. Securities and Exchange Commission (SEC) has executed a quiet but radical shift in its crypto enforcement strategy, effectively granting amnesty to the industry’s largest players while maintaining pressure on smaller competitors. 

Since President Donald Trump took office, the agency has paused or dismissed over 60% of the digital asset investigations initiated by the previous administration. 

Major Crypto Firms Benefit from SEC’s ‘Selective Enforcement’

For instance, the Gemini Space Station faced a federal lawsuit before the Trump administration took over. However, the case has already been dropped and Gemini recently listed its shares for public trading on the NASDAQ exchange.

The U.S. SEC has also dropped its charges against Binance, the leading global crypto exchange with over 300 million registered users. The recent Presidential pardon of former Binance CEO Changpeng Zhao further solidified Binance legal clarity in the United States.

Related: SEC Chair Atkins Formalizes ‘Tokenization First’ Policy to Modernize U.S. Capital Markets

The U.S. SEC has also dropped the prior lawsuit for Ripple Labs, thus ending the four-year litigation. According to a report by the NYT, lawyers who have brought some of these cases have expressed concern about the pullback rate.

For example, Christopher Martin, a former senior trial counsel at the SEC who led one of the dropped cases, said the agency has helped through investors under the bus. Without a clear market structure, Martin noted that the SEC has played a key role in throwing investors to the ‘wolves’.

Selectivity Enforcement in Action

The U.S. SEC has, however, continued with its enforcement actions against some crypto firms believed to have violated the securities law. For instance, the agency charged Unicoin Inc. earlier this year, with the case ongoing for making false and misleading statements in its token offerings.

According to the NYT report, the less politically connected crypto firms are still under investigation by the agency. The report argued that selective enforcement may continue until the U.S. lawmakers pass the market structure bill dubbed the Clarity Act.

What are the Market Implications

The selective enforcement by the U.S SEC has reshaped which crypto firms are favored by investors. For instance, Ripple’s XRP rallied to a new all-time high after the SEC dropped its charges earlier this year. 

Essentially, mainstream crypto Investors tend to favor web3 projects with legal clarity, and vice versa.

Related: Polymarket and Kalshi Face a New Rival as Gemini Enters Prediction Markets With Oversight