In March 2024, the U.S. Securities and Exchange Commission (SEC) concluded investigations into Web3 gaming giant Immutable and Crypto.com. Both companies had previously received a "Wells" notice, which meant potential prosecution, but ultimately ended without charges.
Immutable explicitly stated this was a "progress in regulatory clarity," and the pace of progress has been changing the fate of crypto companies previously targeted by the SEC. Previously, the SEC reached a settlement with Ripple to return a $75 million fine, ending a three-year legal battle; after the SEC withdrew its lawsuit against Coinbase, the publicly traded exchange's stock soared, with compliant token listings tripling within two weeks.
These actions starkly contrast with former SEC Chairman Gary Gensler's style of "enforcement as regulation". These seemingly isolated events actually reveal the prelude to a shift in SEC regulatory strategy - from a confrontational "enforcement is regulation" logic to a collaborative framework of "rule guidance", with a series of regulatory rule meetings already underway.
This transformation is driven by a restructuring of Washington's power landscape. A potential Trump administration re-election would push crypto policy to a historical turning point: Bitcoin being incorporated into national strategic reserves, national banks authorized to custody crypto assets, the GENIUS Stablecoin Act providing a compliance framework, and crypto-friendly Paul Atkins nominated as SEC Chairman.
Policy relaxation has allowed the sensitive crypto market to smell opportunities, with traditional financial institutions like Franklin Templeton and VanEck rushing to apply for spot ETFs for crypto assets like SOL, with the institutionalization wave visibly reshaping the crypto market's structure.
SEC "Loosens" Regulations for Several Crypto Companies
Just completed the first quarter of 2025, the SEC's regulatory style in the crypto realm has quietly transformed - from hard-line enforcement to cautious balance, a transition gradually becoming clear through a series of landmark events.
On March 25th, the SEC officially ended its 17-month investigation into Australian Web3 gaming giant Immutable, confirming that its IMX token's issuance and sale in 2021 did not violate securities laws. The investigation, which began with a "Wells Notice" in November 2024, concluded with "no charges".
[Image]
Immutable President Robbie Ferguson candidly stated, "This move brings regulatory clarity to the Web3 gaming industry and is expected to drive more institutional investment."
Benefiting from this "loosening" is not just Immutable.
On March 26th, the SEC agreed to return $75 million of the $125 million fine against Ripple, retaining only $50 million to close the case. This years-long legal tug-of-war ended with a compromise, maintaining regulatory authority while signaling a softening approach.
In fact, since the beginning of the year, the SEC has intensively terminated multiple controversial investigations, including companies like Robinhood, OpenSea, and Yuga Labs, with investigations either withdrawn or suspended.
In February, the SEC withdrew additional penalties against Kraken's "staking as a service" business; in March, it reached a settlement with an anonymous DeFi protocol, only requiring partial function registration and a small fine; even in privacy tools, the SEC dropped securities law charges against Tornado Cash developers, instead collaborating with the Treasury to develop a technologically neutral regulatory approach.
Simultaneously, the SEC withdrew its lawsuit against Coinbase, driving its stock price up 4% in early trading. The market was sharp, with compliant token issuance surging twofold within two weeks of the Coinbase lawsuit withdrawal. According to Kaiko's data, Coinbase added 10 new tokens in February, compared to an average of 2.3 tokens monthly in 2023 and 3.4 tokens monthly in 2024.
The deeper regulatory logic transformation is more reflected in redefining emerging fields. In December 2024, the SEC withdrew lawsuits against NFT projects like Impact Theory and Stoner Cats, only retaining action against obvious Ponzi-like projects promising returns. In January 2025, the SEC ended the investigation into former executive Hinman's "Ethereum is not a security" speech, avoiding new rulings on ETH's attributes and preserving token classification flexibility.
Behind these actions is the SEC's strategic shift from "enforcement is regulation" to "rule guidance".
On January 21st, the SEC formed a crypto-specific working group led by Acting Chair Mark T. Uyeda, attempting to hear industry and expert opinions to help the SEC define clear regulatory paths, provide practical registration routes, establish reasonable disclosure frameworks, and wisely deploy enforcement resources.
[Image]
On March 21st, this working group discussed key crypto regulatory areas around "defining safety", chaired by Troy Paredes from Paredes Strategies LLC, with invited experts primarily from legal, financial, and venture capital companies involved in blockchain and crypto assets, many of whom previously worked at the SEC.
SEC Crypto Working Group leader Hester M. Peirce stated, "The crypto working group roundtable provides an opportunity for us to hear experts discuss regulatory issues and what measures the commission can take to address them."
Multiple Crypto Asset Spot ETFs in the Pipeline
The turning point is hidden in the political chessboard.
With Donald Trump's potential re-election, "Bitcoin" again enters public consciousness, with Trump 2.0 pledging to establish a more definitive crypto regulatory policy.
This "second-term" president reversed his previous skeptical attitude towards crypto, signing an executive order in early 2025 to "establish a Bitcoin strategic reserve", declaring the conversion of forfeited assets into a national digital asset inventory.
Simultaneously, the U.S. Congress is pushing the GENIUS Stablecoin Act, requiring 100% reserve asset backing for stablecoins, providing a compliance template for in-game payment tokens, abolishing SAB 121 accounting standards that hindered traditional financial institutions from crypto asset custody, and allowing national banks to participate in node verification and asset custody.
The Trump administration's personnel arrangements are further strengthening the crypto policy shift.
In January, Trump nominated Paul Atkins as SEC Chairman. Atkins has long advocated guiding industry development by establishing clear regulatory rules rather than relying on litigation. During his SEC commissioner tenure, he frequently criticized the SEC's "enforcement is regulation" strategy, believing it created uncertainty and hindered innovation.
Acting Chair Mark T. Uyeda's advocated regulatory loosening aligns with Atkins' crypto-friendly stance. For instance, Uyeda terminated lawsuits against Kraken and Coinbase from the Gensler era, and during Atkins' nomination confirmation, Uyeda has already promoted multiple policy adjustments, including establishing a crypto working group led by "Crypto Mom" Hester Peirce, shifting focus from "catching violations" to "defining rules".
From president to SEC chair, as people change, the U.S. administrative attitude towards the crypto industry has also changed, with "regulatory relaxation" and "accelerated construction" happening simultaneously.
After BTC and ETH spot ETFs, multiple crypto assets like Solana (SOL) and Avalanche (AVAX) have entered the ETF application sequence, with Ripple's CEO suggesting an XRP ETF might land in 2025. Traditional financial institutions are moving quickly, with veteran asset management firms like Franklin Templeton and VanEck rushing in.
On March 12, 2025, Franklin Templeton submitted a spot SOL ETF application, becoming one of the first traditional asset management giants to enter the Solana ETF market. Besides SOL, the company also applied for a DOT ETF. On March 25, 2025, CBOE represented Fidelity in submitting a 19b-4 application file for a spot SOL ETF to the SEC, planning to list on the BZX exchange.
Grayscale plans to convert its Solana Trust Fund into a spot ETF, which will be listed on the NYSE under the code GSOL if approved. The application is currently under SEC review. Additionally, multiple companies including VanEck, 21Shares, Bitwise, and Canary Capital have submitted applications, with the market expecting over 70% probability of SOL ETF approval by 2025.
Avalanche (AVAX) has also entered the ETF application process. In March 2025, VanEck submitted an S-1 application file for an Avalanche spot ETF. The SEC has not yet publicly disclosed its opinion, but the market speculates that its approval rhythm might follow the SOL ETF, with a key review period expected in the second half of 2025.
The SEC, which has investigative, punitive, and civil litigation powers in the securities regulatory field, is beginning to show a friendly face towards crypto assets by resolving legacy issues through settlements, withdrawing lawsuits, or terminating and suspending investigations, and plans to host a conference this year specifically discussing crypto asset market regulation.
SEC to host 4 roundtable meetings on crypto asset regulation in the first half of the year
According to SEC official information, four roundtable meetings will be held in April, May, and June this year to discuss crypto asset regulation. The meeting themes will cover specialized regulation, cryptocurrency custody, on-chain transfers of tokenized assets, and DeFi. Each roundtable meeting will be open to the public at the SEC headquarters and will be livestreamed on SEC.gov.
With US policy relaxation and the dense entry of traditional financial institutions, crypto assets are moving from the "edge of experimentation" to a historical turning point of "mainstream introduction", and an era of dynamic balance between "regulation and innovation" is about to begin.
What do you think about the SEC's change in stance and its potential market impact?
