Trump Administration and SEC Shift Approach to Cryptocurrency Regulation

David Zaslowsky of Baker McKenzie writes that the US Securities and Exchange Commission has shifted its approach to cryptocurrency regulation under the Trump administration. Recent litigation developments reflect this shift.

In SEC v. Binance, both parties requested a 60-day stay, citing the potential impact of a newly established cryptocurrency task force led by Commissioner Hester Peirce.

Former Chair Gary Gensler took an aggressive stance, classifying many cryptocurrencies as securities and pursuing enforcement actions against major firms like Coinbase and Binance. However, the agency appears to be moving toward a more lenient regulatory framework. 

The Peirce-led task force aims to provide clearer regulatory guidelines, and the SEC has requested pauses in several cryptocurrency-related cases, signaling a shift in enforcement priorities.

From 2021 to early 2025, under Gensler’s leadership, the SEC focused on investor protection and market integrity. It classified many digital assets as securities and pursued litigation against firms accused of non-compliance.

However, the Trump administration’s SEC leadership, including Acting Chairman Mark Uyeda and Peirce, criticized this approach for stifling innovation. The new task force aims to refine SEC policies, provide realistic compliance paths, and adopt a balanced enforcement strategy.

In SEC v. Cumberland DRW LLC, the SEC sought an extension to respond to a motion to dismiss. In Lejilex v. SEC, where a cryptocurrency firm sought preemptive legal clarity, the SEC requested to postpone oral arguments.

Additionally, Attorneys General from 18 states sued the SEC over its regulatory reach, and the SEC requested more time to respond.

These developments suggest a shift towards a more business-friendly cryptocurrency regulation for law firms advising cryptocurrency clients. To navigate compliance effectively, legal practitioners should monitor task force updates and evolving SEC policies.