Trump’s Second Term Sparks Major Shift in SEC Crypto Policy
Since President Donald Trump returned to office in January 2025, the Securities and Exchange Commission (SEC) has dropped over 60% of ongoing crypto cases. This data was revealed in an investigation conducted by the New York Times.
Summary
- A New York Times investigation revealed that more than 60% of active crypto lawsuits were paused, eased, or dismissed completely after Trump’s return to power.
- These cases involve well-known Trump supporters, the Winklevoss twins, and other major investors.
- The SEC insists that the decisions made were part of legal and policy shifts, not political ties. However, critics have raised concerns about the SEC’s actions, saying it could harm investors and the broader financial system.
The SEC going easy on Trump Supporters
The U.S. Securities and Exchange Commission (SEC), an independent federal agency that oversees the stock market, investment advisors, and mutual funds, aims to prevent fraud and ensure transparency. An investigation by The New York Times revealed that the regulatory agency, which has taken a tough stance on fair dealings and violations, has suddenly moderated its approach.
According to the investigation, the SEC has dropped, paused, or dismissed more than 60% of its crypto cases since Trump’s second term. An example is the case against Binance. The U.S. SEC initially sued Binance in June 2023, alleging that the company violated the U.S. securities laws. It was also claimed that Binance was operating an unregistered exchange and engaging in activities that put U.S. investor capital at risk. However, the agency dismissed the lawsuit on May 29, 2025, as part of compliance with new policies introduced under new leadership.
Another example is the long-running battle with Ripple Labs. In December 2020, the SEC sued Ripple, alleging that the company raised over $1.3 billion through unregistered securities offerings by selling its XRP token. However, in August 2025, the SEC and Ripple filed a joint stipulation to dismiss the upcoming appeals. Additionally, the hefty fine of $2 billion on Ripple Labs was reduced to nearly $125 million. The firm apparently donated a sum of $5 million to Trump’s inaugural fund.
The SEC also dropped cases against other major crypto firms. The investigators found that many of these companies had ties to Trump’s business endeavors or were his political donors. However, the agency dismissed these claims and argued that the shift in regulatory policies was not based on political ties but on changing legal strategies. The agency under Trump’s leadership also blamed Biden’s administration for “overreach,” claiming that it lacked a solid legal basis.
Overall, the New York Times noted that the agency has dismissed over seven cases against the crypto-based firms since January. Other cases have either been paused, conceded, or settled.
What do critics say?
Critics are not buying the SEC’s explanation for dropping or settling all major crypto cases. They argue that the agency has given in to the wolves and weakened its role in protecting them. Moreover, they warned that such leniency would bring in another round of scams and financial mishandling.
The major crypto platforms that are making donations to Trump’s campaign would have some impact on the SEC’s current policies. It could also pave the way to systemic risk due to unregulated crypto companies.
Conclusion
Even when the SEC denies political favoritism, the New York Times investigation clearly shows the timing of donations to Trump’s campaigns and inaugural functions, and the agency’s sudden dropping or pausing of cases. Caroline Crenshaw, the sole Democratic commissioner in the SEC, criticized the change in policies and regulations that accommodate crypto companies. She warned that relaxed and slackened regulations would lead to market contagion. However, Republican counterparts view these changes as a way to correct past overreach.