Cryptocurrencies have long moved beyond niche investments and become a visible part of the global financial system. In the USA, the main regulatory authority in this sector is the SEC (Securities and Exchange Commission). Its actions directly impact cryptocurrency prices, trader activity, and the launch of new projects. Over the past few years, the SEC has significantly increased pressure on the crypto sector, sparking both support and resistance from market participants. In this article, Baltimore Chronicle’ll explore how exactly the SEC influences the cryptocurrency market, what regulatory initiatives have been introduced, and what to expect in the near future.
The Role of the SEC in US Financial Regulation
The SEC is the key government body in the United States responsible for regulating financial markets and protecting investor rights. Its main task is to ensure transparency and fairness in stock and related markets.
Main functions of the SEC
- Monitoring compliance with securities laws
- Promoting transparency of stock exchange operations
- Protecting investors from fraud
- Registering new financial instruments
- Auditing the activity of investment companies
In the case of cryptocurrencies, the SEC considers some of them not just digital assets but securities, which brings them under the regulator’s jurisdiction.
Why the SEC Intervenes in the Cryptocurrency Market
The reason for the SEC’s active intervention in the cryptocurrency space lies in the complexity and novelty of this market. Many crypto projects conduct ICOs (initial coin offerings), similar to IPOs in the traditional market. However, they often bypass legal norms.
Main reasons for SEC intervention:
- The spread of fraudulent schemes among crypto projects
- High risks for inexperienced investors
- Lack of control over financial flows
- Undefined legal status of many cryptocurrencies
- Threats to financial stability in case of major platform collapses
The SEC believes the market should be more transparent and accountable to users, especially in the US.
High-Profile SEC Cases Against Crypto Companies
In 2023–2024, the SEC actively pursued several well-known crypto platforms and tokens. Many of these cases gained widespread attention and significantly affected the market.
Notable examples:
- Ripple (XRP) – One of the largest cases, where the SEC accused Ripple of illegally selling securities worth over $1.3 billion.
- Binance.US – Accusations of violating registration requirements and manipulating user assets.
- Coinbase – Investigation into trading unregistered securities.
- Terra/LUNA – Case regarding the collapse of the UST stablecoin, which led to billions in losses.
- Kraken – Claims against its staking program, which the SEC considers an investment product.
Such court cases not only trigger panic among investors but also shape new legal practices in the cryptocurrency field.
How the Rules Are Changing for Investors
SEC regulations force investors to be more cautious when choosing platforms and assets. In particular, more and more crypto exchanges are introducing KYC/AML checks and restricting access to certain tokens.
Key changes for investors:
- Mandatory identity verification
- Decreased anonymity
- Restrictions for non-US residents
- Reduced access to new tokens
- Increased legal support costs for investments
All this makes the crypto market less of a “wild zone” but also less accessible for beginners.
Consequences for the Crypto Market as a Whole
SEC regulations produce both positive and negative outcomes for the market. On one hand, institutional investors are gaining more confidence. On the other — the development of some technologies is slowing down.
Positive outcomes:
- More market transparency
- Protection from fraud
- Influx of “smart money” from major funds
- Higher quality of projects
Negative outcomes:
- Fewer startups
- Migration of projects to jurisdictions with softer rules
- Increased compliance costs
- Sometimes — excessive overregulation
Comparison: Crypto Regulation in the USA and Other Countries
Different countries take varying approaches to cryptocurrencies. The USA leans toward strict regulation through the SEC, while countries like Switzerland and the UAE create favorable conditions for Web3 development.
| Country | Regulator | Approach to Cryptocurrencies | Features |
|---|---|---|---|
| USA | SEC, CFTC | Strict, high-level control | Frequent lawsuits |
| Switzerland | FINMA | Positive, supportive | Token legalization |
| Singapore | MAS | Moderate | Control but promotion of innovation |
| UAE | VARA | Very favorable | Crypto zones in Dubai |
| China | PBOC | Prohibitive | Cryptocurrencies are illegal |
The Future: What to Expect from the SEC in 2025
Analysts predict continued tightening of control by the SEC. New laws are expected to more clearly define the status of tokens and the requirements for crypto companies.
Potential SEC actions:
- Differentiation of tokens into utility and security
- Licensing of crypto exchanges
- Joint initiatives with other countries
- Establishment of disclosure standards
- Introduction of control over smart contracts
These initiatives could significantly change the market landscape in the coming years.
Earlier we wrote what is an ETF in simple terms.