The SEC’s pivot from registration wars to fraud enforcement

The SEC dismissed its registration-theory cases against Coinbase and Kraken in 2025. Because these dismissals include prejudice as to the conduct alleged, the Commission cannot refile those claims. I see the end of the existential threat regarding whether a platform operates as an unregistered exchange. The Ripple penalty of $125,035,150 remains because the court ruled programmatic sales are not securities. While the SEC dropped most registration cases against major exchanges in 2025, the agency continues to prosecute fraud, which explains why every one of the eight actions initiated under Chair Paul Atkins contained fraud allegations. The agency also closed investigations into Uniswap Labs, Crypto.com, Yuga Labs, and others without filing charges. The Commission dismissed cases against Consensys and Cumberland DRW in March 2025. The SEC dismissed its action against Binance and Changpeng Zhao on May 29, 2025, despite charges of misrepresenting trading controls on the Binance.US platform. Under Acting Chairman Mark Uyeda, the SEC also dismissed Dragonchain and Balina. SEC enforcement volume fell 60% between 2024 and 2025, dropping from 33 actions to 13. Monetary penalties in 2025 reached $142 million, which represents a sharp decline from the $4.98 billion in recoveries seen in 2024. The $4.55 billion Terraform judgment dominated the 2024 total of $4.98 billion in recoveries. The 2024 enforcement wave included 25 federal court suits and 8 administrative proceedings involving 90 defendants.

New rules for token issuers

The SEC proposed Regulation Crypto Assets on August 18, 2026, to address the growing ambiguity in token classifications. This framework introduces two distinct exemption tiers for token offerings. You should review your own token classification against these new rules.

The startup tier allows issuance without accredited-investor requirements via Form NOR. This tier targets early-stage projects needing capital without a full registration burden. The fundraising tier includes a $20 million Tier 1 limit and a $75 million Tier 2 limit. Tier 2 issuers must file on Form 1-CRYPTO and provide audited financials. Non-accredited buyers under Tier 2 face a cap of 10 percent of income or net worth. The proposal also includes a conditional safe harbor from the term "investment contract" once an issuer fulfills managerial promises. This separation concept allows a token to exit its security status once a project meets decentralization milestones. The 60-day comment period for this proposal ends on October 18, 2026.

Fraud remains the primary risk

The agency focuses its resources on direct investor harm. The 2024 Terraform judgment of $4.47 billion against Do Kwon and Terraform Labs shows the scale of these penalties. The DOJ secured a 15-year sentence for Do Kwon in December 2025. I find the continued focus on fraud cases like the August 2026 Goliath Ventures action to be a harsh reality for developers. The SEC also charged Cryptoaiml Capital Foundation and TSAI Pro Ltd. in late September 2026. The March 2026 interpretive release classifies assets into five categories: digital commodities, digital collectibles, digital tools, payment stablecoins, and digital securities. To trigger the Howey test, an arrangement requires an investment of money in a common enterprise with an expectation of profits from the efforts of others. Staking and mining rewards sit outside securities law. The whistleblower program received 53,753 tips in fiscal 2025. The agency paid 48 whistleblowers a total of $60 million. The 2024 Supreme Court ruling in SEC v. Jarkesy ensures that defendants receive a jury trial for fraud civil penalties. The agency’s 2026 focus on exchange misconduct and manipulated token launches replaces the 2023 focus on registration. The agency’s taxonomy applies the Howey framework factor by factor. Will the CLARITY Act pass the Senate?