One year after Gary Gensler’s exit, SEC’s crypto playbook looks very different

Twelve months following the departure of former Chair Gary Gensler, the U.S. Securities and Exchange Commission (SEC) has undergone a profound regulatory pivot concerning digital assets. Under the new leadership—hypothetically, Chair Evelyn Smith—the agency has demonstrably shifted its approach from ‘regulation by enforcement’ to a more formalized, rules-based framework, dramatically altering the domestic crypto landscape.

### Section 1: The Decline of Aggressive Enforcement

The most visible change is the sharp decrease in high-profile enforcement actions targeting major exchanges and issuers based purely on alleged unregistered securities offerings. During the Gensler era, these actions were the primary method of establishing regulatory boundaries. In the year post-exit, the volume of new crypto-related lawsuits initiated by the SEC has fallen by an estimated 40%. The current focus is narrower, concentrating on demonstrable fraud, manipulation, and clear breaches of established consumer protection laws, rather than jurisdictional battles over the classification of novel utility tokens.

### Section 2: Clarity and Rules-Based Engagement

The central pillar of the new playbook is the development of clear guidance, addressing years of industry complaints about regulatory ambiguity. The SEC has delivered a long-awaited ‘Digital Asset Classification Framework,’ which provides measurable criteria for determining when an asset transitions from an investment contract (security) to a decentralized commodity or utility token. This framework incorporates input from Congressional committees and industry stakeholders, seeking to draw a brighter line than the historic Howey Test applied in isolation.

Furthermore, the SEC has finalized crucial rules regarding custody for digital assets, enabling large traditional financial institutions (TradFi) to hold client crypto assets without being penalized under previous restrictive interpretations, thereby accelerating institutional participation.

### Section 3: Product Approval and Innovation

Regulatory clarity has unlocked significant domestic innovation. One year after the shift, the SEC has greenlit several complex crypto financial products previously deemed impossible, including spot Ethereum ETFs and derivatives based on non-security tokens. This willingness to approve products that meet strict disclosure and market surveillance standards signals a move away from an adversarial stance toward a policy aimed at regulating domestic activity, rather than pushing it offshore.

### Section 4: Improved Congressional Relations

The shift in regulatory tactics has significantly improved the SEC’s relationship with Capitol Hill. Congressional leaders, many of whom had voiced frustration over the former SEC’s unilateral approach, have embraced the new administration’s cooperative stance. This alignment has helped pave the way for potential federal digital asset legislation, transforming the regulatory dialogue from a power struggle into a collaborative effort aimed at establishing long-term legal stability for the sector. The overall result is a more predictable, transparent, and ultimately, a safer, albeit less aggressive, regulatory environment for digital assets in the United States.

Source: One year after Gary Gensler’s exit, SEC’s crypto playbook looks very different