SEC enforcement sharply reduced by 30%! Atkins bids farewell to Gensler's iron-fisted era, Crypto Assets winter thawed.

Consulting firm Cornerstone Research reports that the number of enforcement actions implemented by the current leadership of the U.S. Securities and Exchange Commission (SEC) has significantly decreased compared to the previous session. Under the leadership of SEC Chairman Paul Atkins, the number of enforcement actions against publicly traded companies and their subsidiaries in fiscal year 2025 decreased by approximately 30% compared to fiscal year 2024, signaling the end of the Gary Gensler era.

Cornerstone Research Report Reveals SEC Enforcement Plummets 30%

(Source: Cornerstone Research)

A report released by Cornerstone Research on Wednesday showed that under the leadership of SEC Chairman Paul Atkins, the number of enforcement actions against public companies and their subsidiaries in fiscal year 2025 decreased by about 30% compared to fiscal year 2024. The firm stated that this data “is consistent with the general pattern of other fiscal years when there was a change in management at the U.S. Securities and Exchange Commission (SEC),” referring here to former Chairman Gary Gensler.

This 30% decrease is quite significant in absolute numbers. If there were about 500 enforcement actions per year during the Gensler era, a 30% reduction means that under the Atkins era, there are only about 350 actions, which is a decrease of 150 cases. Such a scale of change is not just a fluctuation in statistical numbers but reflects a fundamental shift in the SEC's enforcement priorities and strategies.

Cornerstone Research is a consulting firm focused on the financial and regulatory sectors, and its reports are highly credible in the industry. The company releases statistical analyses of SEC enforcement actions annually, which are widely cited by lawyers, compliance officers, and investors. As a result, the report indicating a 30% reduction in enforcement immediately sparked widespread attention and discussion in the industry.

The transition from Gary Gensler to Paul Atkins is not just a personnel change, but a shift in regulatory philosophy. Gensler was known for his iron-fisted enforcement during his tenure, particularly in the cryptocurrency space, where he led lawsuits against major companies like Ripple. In contrast, Atkins has a background more aligned with market-friendly regulation; he served as an SEC commissioner during the Bush administration and acted as an advisor for financial services companies in the private sector, criticizing excessive regulation.

Cornerstone stated: “This dismissal aligns with the established priorities of the current leadership of the SEC. Chairman Atkins has indicated that the 'top priority' of his leadership is to 'provide a solid regulatory foundation for digital assets through a rational, coherent, and principled approach.'” This statement clearly shows that Atkins is shifting the SEC's focus from enforcement to rulemaking and guidance.

The chain reaction of the SEC's dismissal of the case against the largest cryptocurrency exchange in the U.S.

Although financial regulators withdrew investigations and lawsuits against several cryptocurrency companies after Gensler's departure, the report only mentioned the case against the largest U.S. cryptocurrency exchange that the SEC withdrew in February. In fact, the number of cryptocurrency cases that the SEC has withdrawn or settled since Atkins took office is far more than just that of the largest U.S. cryptocurrency exchange. Cases involving companies like Ripple Labs and Consensys have also been resolved or significantly softened.

The dismissal of the case against the largest cryptocurrency exchange in the United States is significant. The SEC, under Gensler's era, sued the largest cryptocurrency exchange in the U.S. in June 2023, accusing it of operating an unregistered securities exchange, broker, and clearing agency. This lawsuit is viewed as a core case for the SEC's regulatory strategy toward the cryptocurrency industry, as the largest cryptocurrency exchange in the U.S. is publicly listed on Nasdaq. If the SEC's accusations against the largest cryptocurrency exchange in the U.S. are upheld, it could trigger a chain of lawsuits against the entire cryptocurrency exchange industry.

However, after Atkins took over, the SEC withdrew its lawsuit against the largest cryptocurrency exchange in the United States in February 2025. This decision sent a clear signal to the market: the SEC under Atkins is no longer prioritizing “regulating through litigation” as its main strategy, but rather seeks to establish a regulatory framework through dialogue and rulemaking. The stock price of the largest cryptocurrency exchange in the United States surged significantly after the lawsuit was withdrawn, indicating the market's welcome of this regulatory shift.

SEC's Major Crypto Cases Dismissed or Settled During the Atkins Era

Largest Crypto Exchange in the US: February withdrew charges of unregistered securities exchange and others

Ripple Labs: Reached a settlement, part of the XRP transactions were deemed not to be securities.

Consensys: Withdraw investigation against MetaMask

Earlier this week, the SEC's review department released its review focus for the fiscal year ending in 2026, but did not mention cryptocurrencies or digital assets. This omission is particularly striking, as during the Gensler era, cryptocurrencies appeared on nearly every SEC priority list. Now, the review focus completely omits cryptocurrencies, indicating that Atkins is removing the crypto industry from the “targeted focus” list.

Government shutdown weakened SEC enforcement capabilities for 43 days

During the U.S. government shutdown that ended last week, the SEC operated with limited staff for 43 days, which weakened its enforcement and regulatory capabilities. After resuming normal operations, the agency released its review priorities for 2026 and continued to review applications for initial public offerings (IPOs), exchange-traded funds (ETFs), and other matters under its jurisdiction.

The impact of the government shutdown on SEC enforcement activities cannot be ignored. A 43-day shutdown means that most SEC employees are on unpaid leave, with only a few “essential personnel” maintaining basic operations. During this time, new investigations cannot be initiated, the progress of existing cases is hindered, and many time-sensitive applications are delayed. This disruption in operations not only affects the enforcement numbers for fiscal year 2025 but may also have lasting effects on fiscal year 2026.

However, after the government shutdown ended, the SEC did not experience a retaliatory rebound in enforcement activities. Typically, regulatory agencies would accelerate the processing of backlog cases after an operational interruption, leading to a surge in enforcement numbers in the short term. However, under Atkins' leadership, the SEC chose a more moderate recovery path, prioritizing the review of IPO and ETF applications rather than initiating new enforcement cases. This prioritization aligns with its established policy of “providing a solid regulatory foundation for digital assets.”

The government shutdown also exposed the SEC's vulnerabilities in personnel and resource allocation. Although the SEC is an independent regulatory agency funded through industry fees, its operations are still constrained by the federal budgeting process. The 43-day shutdown prevented the SEC from operating at full capacity, which may prompt Atkins to reassess the SEC's resource allocation strategy, focusing limited personnel on the most important regulatory tasks rather than spreading them thin for enforcement.

The Market Structure Bill Will Reshape Crypto Regulation Landscape

As of Tuesday, the Republican leaders of the Senate Banking Committee are expected to pass a comprehensive bill on the market structure of digital assets in early 2026. The initial timeline anticipated that the bill would be signed into law by the end of the year, but it has been delayed due to the government shutdown and opposition from Senate Democrats to the DeFi provisions.

If the bill is passed, it will grant the U.S. Commodity Futures Trading Commission (CFTC) significant authority to regulate digital assets. This will change the current unclear responsibilities between the SEC and CFTC in crypto regulation. Currently, the SEC asserts that most cryptocurrencies are securities and should be under its regulation; while the CFTC believes that assets like Bitcoin and Ethereum fall under commodities and should be governed by it. This regulatory vacuum and overlap have led to significant compliance uncertainty for crypto businesses.

The market structure bill is expected to clearly delineate the jurisdiction of the SEC and CFTC, potentially assigning most crypto assets to the CFTC's oversight, while only clearly defining securities-like tokens under the SEC's jurisdiction. This clear division of responsibilities will provide certainty for the crypto industry, allowing businesses to clearly understand which rules to comply with and which agency to apply for licenses.

Atkins stated that, according to the powers that the SEC may obtain, its enforcement力度 will not “ease up,” and it is likely to include cases involving cryptocurrencies. This statement deserves careful interpretation. Atkins does not imply that the SEC will completely abandon cryptocurrency regulation, but rather emphasizes that under a clear legal framework, the SEC will continue to enforce against truly unlawful activities. This stands in stark contrast to the “sue first, ask questions later” strategy of the Gensler era. Under the new framework, the SEC's enforcement will be based on clear rules rather than a broad interpretation of securities laws.

The opposition of Senate Democrats to the DeFi provisions is the main reason for the delay of the bill. Democrats are concerned that overly lenient DeFi regulations could facilitate money laundering and tax evasion, and they are calling for stricter KYC and AML requirements on decentralized protocols. Republicans argue that excessive regulation will stifle innovation and advocate for a more hands-off approach to DeFi regulation. This divergence needs to be resolved through negotiation and compromise, which is also the reason the bill has been postponed until 2026.

The passing of the market structure bill will be a milestone event for the cryptocurrency industry. It will end years of regulatory uncertainty and provide a clear path for cryptocurrency businesses to operate legally in the United States. Coupled with the trend of a 30% reduction in SEC enforcement under Atkins' leadership, the cryptocurrency industry may truly welcome a regulatory spring.