SEC Drops Three Key Crypto Cases as Regulatory Grip Loosens

SEC Softens Stance, Dismisses Three Prominent Crypto Cases

Ohio Republican Senator Bernardo Moreno, on Thursday called former U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, “one of the stupidest people in government.” That same day, the SEC dropped three prominent enforcement actions against crypto exchange Kraken, Ethereum software firm Consensys, and digital asset trading firm Cumberland.

Moreno made his comments during the Senate nomination hearing for Paul Atkins, President Donald Trump’s pick for SEC chairman. The Commission charged Kraken in 2022 with operating “as an unregistered securities exchange, broker, dealer, and clearing agency,” Consensys with “engaging in the unregistered offer and sale of securities” in 2024, and Cumberland with “operating as an unregistered dealer,” also in 2024.

But after Trump promised to overhaul the SEC and in the wake of Gensler’s proactive departure earlier in the year, a cultural shift led by acting Chairman Mark Uyeda has seen multiple enforcement actions shuttered, with Kraken, Consensys, and Cumberland being the latest ones.

“The dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry,” the SEC stated in its litigation releases. “Not on any assessment of the merits of the claims alleged in the action.”

In other words, the Commission is simply extending an olive branch to crypto companies and acting in good faith by dismissing cases that it could have potentially won. The SEC’s goal is to reset its approach and provide regulatory clarity instead of using Gensler’s method of regulation by enforcement.

“Explaining the Commission’s thought process through releases rather than enforcement actions should have been considered for classifying crypto assets under the federal securities laws,” Uyeda said at last week’s first-ever SEC Crypto Roundtable.