SEC Halts Crypto Enforcement Cases Amidst Leadership Transition

The U.S. Securities and Exchange Commission (SEC) has reportedly been prioritizing the pause of cryptocurrency enforcement cases with imminent deadlines, according to Fox Business reporter Eleanor Terrett. This pause is partly why the securities regulator has not yet halted its lawsuits against crypto firms Ripple and Kraken.

The next court deadline for Ripple, the developer of the XRP Ledger blockchain network, is April 16. Meanwhile, cryptocurrency exchange Kraken's next deadline is March 31. Coinbase and Binance do not face court deadlines until March 14 and April 14, respectively.

It is possible that SEC leadership is expecting the confirmation of Paul Atkins, former SEC commissioner and President Trump's pick for chair, by the time these deadlines approach. In the interim, the crypto task force, Congress, and the Presidential Working Group on Digital Assets are presumably working to fill the regulatory gaps that led to these lawsuits.

Under former U.S. President Joe Biden, financial regulators, namely the SEC and the Commodity Futures Trading Commission (CFTC), brought more than 100 lawsuits against crypto firms for alleged legal violations. In 2023, the SEC sued Kraken, alleging that the exchange operated as an unregistered securities broker. The agency also sued Coinbase for purportedly failing to register as a broker, national securities exchange, or clearing agency, thus evading the disclosure scheme for securities markets.

The agency previously took action against these exchanges for offering cryptocurrency staking services in the U.S. Ripple has been mired in a lawsuit with the SEC since 2020, with the regulator alleging that Ripple issued unregistered securities when launching its XRP (XRP) token.

By contrast, U.S. President Donald Trump has taken an industry-friendly approach in his second term, promising to cut back on enforcement actions against crypto firms and make America "the world's crypto capital." Trump has nominated Paul Atkins, a former SEC commissioner, to chair the SEC. The agency has been gradually winding down or pausing enforcement actions against crypto firms. On Jan. 30, 10 days after Trump began his second presidential term, Kraken resumed staking services for U.S. clients for the first time in nearly two years.