SEC’s Crypto War Fades as Ripple, Coinbase Lawsuits Drop

Since US President Donald Trump assumed office, the Securities and Exchange Commission (SEC) has dropped, settled, or paused lawsuits against prominent crypto entities left and right. In stark contrast to the previous administration’s leadership under Chair Gary Gensler, the SEC seems to be parting from its previous crackdown on digital assets.

In an interview with BeInCrypto, Nick Puckrin, Founder of The Coin Bureau, and Hank Huang, Chief Executive Officer at Kronos Research, highlighted the substantial election influence the crypto industry had over Trump’s candidacy as a contributing factor to the SEC’s looser stance on crypto. 

The SEC’s Approach Under Trump

The SEC has experienced a clear shift in its approach to crypto lawsuits under Trump’s presidency. Its move away from the aggressive enforcement tactics of its previous leadership has largely characterized this shift.

“When President Donald Trump won the US election, the crypto industry rejoiced. Finally, the‬ ‘regulation by enforcement’ era, which the SEC under‬‭ the leadership of Gary Gensler was so famous for, was about to come to an end. And the new‬‭ administration didn’t disappoint. Within just a couple of weeks of Trump’s inauguration, the‬‭ revamped SEC started dropping lawsuits against crypto firms‬‭ left, right and center‬‭,” Puckrin said.

Two weeks ago, the SEC officially dropped its appeal and XRP lawsuit against Ripple Labs, ending a five-year legal battle. The Commission had originally accused Ripple of conducting an unregistered securities offering worth $1.3 billion through XRP sales.

“After more‬‭ than four years in limbo, the SEC has officially decided that XRP is not a security (though what it‬‭ is instead remains to be seen). This case has been weighing heavily on XRP – the fourth largest‬‭ cryptocurrency with a‬‭ market cap of roughly $130 billion‬‭– so its resolution is a major win,” Puckrin added.

The wider crypto community celebrated the outcome, with many arguing that it will set a precedent for how digital assets are classified in the US. This prediction is warranted, given that the SEC has been on a lawsuit-dropping spree. 

Ripple and Coinbase Cases Mark Significant Wins

Shortly before ending the Ripple lawsuit, the SEC dropped its legal battle against Coinbase. The case also centered on whether Coinbase should be classified as a security. 

“The‬‭ SEC‬‭ is‬‭ clearly‬‭ retreating‬‭ from‬‭ its‬‭ once-aggressive‬‭ stance‬‭ on‬‭ crypto,‬‭ as‬‭ seen‬‭ in‬‭ its‬‭ 2025‬‭ dismissal‬‭ of‬‭ lawsuits‬‭ against‬‭ Ripple,‬‭ Coinbase,‬‭ and‬‭ others.‬‭ This‬‭ shift,‬‭ driven‬‭ by‬‭ the‬‭ crypto-friendly‬‭ and‬‭ pro-business‬‭ Trump‬‭ administration,‬‭ signals‬‭ a‬‭ future‬‭ of‬‭ more‬‭ streamlined‬‭ and‬‭ transparent‬‭ US‬‭ crypto‬‭ regulation,” Huang told BeInCrypto.

The SEC has also dropped several ongoing investigations against OpenSea, Robinhood, Uniswap Labs, Kraken, and Gemini. It has also asked a federal court to issue a 60-day pause over its litigation against Binance. Meanwhile, the Commission settled its investigation into ConsenSys over its Ethereum software products. 

These lawsuits surfaced in parallel to a series of crypto-friendly measures meant to foster greater innovation and curb potential regulatory suffocation that had existed during the Biden era. 

Will New Leadership Define Clear Crypto Regulations?

A day after Trump assumed office, SEC Acting Chairman Mark Uyeda announced the creation of a dedicated crypto task force led by Commissioner Hester Peirce. The task force was reportedly designed to resolve long-standing ambiguities in the regulatory treatment of digital assets.

In all SEC crypto lawsuits, Commissioner Uyeda has implemented a strategy prioritizing industry engagement to develop regulatory frameworks that balance innovation and investor protection.

Meanwhile, Trump strategically nominated Paul Atkins, a crypto-curious, regulation-light candidate, to replace Gensler as head of the SEC. Just this week, the Senate Banking Committee voted to advance Atkins’ nomination to the full Senate. 

“Driven‬‭ by‬‭ Republican‬‭ principles,‬‭ the‬‭ SEC‬‭ under‬‭ Trump‬‭ could‬‭ implement‬‭ clearer‬‭ crypto‬‭ guidelines‬‭ by‬‭ 2025,‬‭ reduce‬‭ regulatory‬‭ burdens,‬‭ and‬‭ roll‬‭ back‬‭ Biden-era‬‭ policies‬‭ that‬‭ have‬‭ stifled‬‭ innovation‬‭ by‬‭ 2027.‬‭ This‬‭ could‬‭ mark‬‭ the‬‭ beginning‬‭ of‬‭ treating‬‭ most‬‭ digital‬‭ assets‬‭ as‬‭ commodities,” Huang said.

Now, only a stone’s throw away from becoming SEC Chair, Atkins is expected to loosen regulatory oversight on crypto. 

“With‬‭ the‬‭ establishment‬‭ of‬‭ a‬‭ new‬‭ Task‬‭ Force‬‭ and‬‭ key‬‭ appointees‬‭ like‬‭ Paul‬‭ Atkins‬‭ fostering‬‭ innovation,‬‭ Trump’s‬‭ strategic‬‭ move‬‭ to‬‭ create‬‭ a‬‭ Bitcoin‬‭ reserve within the government further underscores his commitment to supporting the industry.‬‭ The‬‭ future‬‭ of‬‭ crypto‬‭ regulations‬‭ will‬‭ be‬‭ focused‬‭ on‬‭ less‬‭ oversight‬‭ and‬‭ the‬‭ beginning‬‭ of‬‭ a‬‭ delicate‬‭ but promising thaw in the regulatory landscape,” Huang added. 

Though some say Trump’s handling of crypto affairs has resulted in a never-before-seen triumph, others are weary that his increasing involvement in the industry has turned out to be a recipe for disaster.

The Impact of Crypto Donations on Regulations

Several industry leaders went to great lengths to ensure that Trump became America’s 47th president. Millions of dollars in donations from crypto firms throughout Trump’s campaign illustrated these efforts.

According to a Public Citizen report, over $119 million from crypto corporations went into influencing the 2024 federal elections, largely through Fairshake, a non-partisan super PAC backing pro-crypto candidates and opposing skeptics.

Coinbase and Ripple, among others who stand to profit, directly provided over half of Fairshake’s funding. The remaining funds mostly came from billionaire crypto executives and venture capitalists. Notable contributions included $44 million from the founders of Andreessen Horowitz, $5 million from the Winklevoss twins, and $1 million from Coinbase CEO Brian Armstrong.

So far, big crypto’s spending strategy is paying off with a more favorable environment.

“Political‬‭ donations‬‭ from‬‭ the‬‭ crypto‬‭ industry‬‭ during‬‭ the‬‭ 2024‬‭ election,‬‭ particularly‬‭ to‬‭ pro-crypto‬‭ candidates‬‭ like‬‭ Trump,‬‭ played‬‭ a‬‭ significant‬‭ role‬‭ in‬‭ shaping‬‭ the‬‭ SEC’s‬‭ 2025‬‭ decision‬‭ to‬‭ drop‬‭ lawsuits‬‭ against‬‭ crypto‬‭ firms.‬‭ These‬‭ contributions‬‭ helped‬‭ align‬‭ the‬‭ administration‬‭ with‬‭ the‬‭ industry’s‬‭ interests‬‭ and‬‭ influenced‬‭ Congress,‬‭ driving‬‭ about‬‭ 50-60%‬‭ of‬‭ the‬‭ shift,” Huang told BeInCrypto.

Without a clear framework to guide the crypto industry following these dropped lawsuits, this lax approach risks being short-lived. Ultimately, this could tarnish long-term crypto adoption.

Meme Coin Scams Highlight Deregulation Dangers

According to Puckrin, the success of the dropped lawsuits was obscured by the lack of regulations that have led to the proliferation of high-profile meme coin scams. 

“Somehow, all these victories feel somewhat hollow after the reputation of the crypto industry‬‭ has been tarnished by the‬‭ billions of dollars‬‭ in combined‬‭ losses from‬‭ meme coin scams‬‭.‬‭ Meanwhile, Hayden Davis, the mastermind behind LIBRA,‬‭ continues to launch fraudulent meme‬‭ tokens‬‭, despite being on the Interpol wanted list,” he said. 

A 2024 report by Web3 intelligence platform Merkle Science revealed that meme coin rug pulls cost investors over $500 million. The February LIBRA incident showed how this trend was carried over to 2025. Nansen data revealed that 86% of investors lost $251 million, while insiders pocketed $180 million in profits.

Though crypto scammers may be charged with related crimes like wire fraud or money laundering, rug pulling is legal. Better said, it’s unaccounted for. No regulation holds crypto insiders responsible for meme coin scams.

“As crypto becomes an ever more mainstream asset class, consumers need to be protected‬‭ against those who choose to use it for nefarious purposes. One way to do this is through‬‭ education, and that’s our job as an industry. But deterring scams and extractive behavior is the‬‭ job of the regulators. And it’s time they stepped up to the task,” Puckrin told BeInCrypto.

If the SEC doesn’t take advantage of this opportunity to curb the consequences that meme coin scams can produce, it will result in an enormous setback for the industry.

Comprehensive Regulation Beyond Dropped Lawsuits

‭Puckrin illustrated the need for heightened regulatory clarity in crypto by drawing attention to the way the SEC penalizes insider trading in the context of traditional investing. 

“In traditional investing, insider trading is a serious crime. In the US, it’s‬‭ punishable by‬‭ fines of up‬‭ to $5 million for individuals and prison sentences up to 20 years. Similarly, federal penalties for‬‭ engaging with illegal gambling activities include‬‭ up to five years in prison‬‭. Perpetrators of‬‭ memecoin scams must be punished with the same level of severity, because the result is the‬‭ same: manipulating markets and cheating unsuspecting investors out of their savings,” he said. ‭

Puckrin clarified, however, that the issue isn’t solely about penalizing fraudsters. Just as the SEC’s past overregulation hindered the industry, the current lack of meme coin rules creates an environment where new scams and exploitative schemes can easily flourish.

“Yes, the removal of lawsuits is‬‭ great news for blockchain innovation, but something needs to replace it. Indeed, serious‬‭ cryptocurrency firms have never advocated for an unregulated Wild West.‬‭ What they want is clarity and rules that are fit for the nascent blockchain industry – not just a‬‭ copy-and-paste of existing financial regulations that simply don’t work for crypto,” he said. 

Although the Trump administration has only been in place for four months, the clock is ticking, and meaningful change takes time.

Unanswered Questions Loom

Puckrin expressed concern over the current administration’s prioritization of lawsuit dismissals instead of working faster to implement transcendental crypto regulation.

“My concern is that‬‭ regulators will keep kicking the can down the road with crypto regulation, having gained the‬‭ approval of the industry for dropping the many lawsuits that were stifling its growth. And this is‬‭ incredibly dangerous,” he told BeInCrypto. 

Meanwhile, critical questions that only the SEC can define remain unanswered. 

“What are memecoins and who will ensure another LIBRA fiasco‬‭ doesn’t happen? Are utility altcoins now commodities and if so, will the Commodities Futures‬‭ Trading Commission (CFTC) regulate them? And, importantly, what do we do about‬‭ compensating investors who have lost‬‭ billions to crypto‬‭ fraud‬‭?” Puckrin concluded.‭

The SEC’s current direction promises a regulated renaissance or a breeding ground for future crises.

With billions lost and critical questions unanswered, the future of crypto hinges on whether the regulatory body will translate its recent shift into a lasting framework that fosters innovation without sacrificing investor protection.