From Enforcement to Embrace: How Washington Rewrote Its Crypto Policy in Under 100 Days

At the start of this year, the largest crypto companies in the United States were defendants. The Securities and Exchange Commission was litigating against major exchanges, arguing that many tokens traded on them were unregistered securities. Banks had been warned away from crypto custody. Federal prosecutors had a dedicated unit targeting digital-asset crime. Less than a hundred days later, most of that architecture has been dismantled or reversed. The shift illustrates something larger than a change of administration: it shows how contested the question of who controls crypto remains, and how quickly the balance can tip when the executive branch decides to use every lever it has.

The sequence of reversals

The first moves came in the opening days of the new term. The SEC's acting leadership announced a crypto task force led by Commissioner Hester Peirce, long the agency's most prominent internal critic of its enforcement-first approach. Within days, the agency rescinded Staff Accounting Bulletin 121, guidance that had made it expensive for banks and public companies to hold crypto on behalf of customers. An executive order on January 23 set up a presidential working group on digital assets and ordered agencies to review their existing rules.

In February and March, the SEC dropped or paused a string of high-profile cases, including its lawsuit against Coinbase, and closed investigations into several other firms. On March 6, an executive order established a Strategic Bitcoin Reserve and a separate stockpile of other digital assets, to be funded initially with coins already forfeited to the government. Bank regulators withdrew earlier guidance that had required supervised banks to seek approval before engaging in crypto activities. And on April 7, the deputy attorney general issued a memo narrowing the Justice Department's focus to fraud against investors and the use of crypto in crimes such as terrorism and drug trafficking, disbanding the department's specialized crypto enforcement team.

Why the turn happened so fast

Part of the explanation is political. The crypto industry was among the largest spenders in the 2024 election cycle, and candidates who campaigned against the previous SEC approach did well. Part is institutional. Much of the old policy rested not on statutes passed by Congress but on agency interpretation, guidance and litigation choices. What an agency chooses to do, a new leadership can choose to undo. The Senate confirmed a new SEC chair this week, and the agency's direction is expected to consolidate further.

This is the central weakness that critics on both sides identified long ago. For years, the industry complained of 'regulation by enforcement,' meaning rules announced through lawsuits rather than written in advance. The reversal is, in a sense, deregulation by non-enforcement: rules unwound through dropped cases and withdrawn guidance rather than new legislation. Neither approach gives markets durable clarity.

Policy made by lawsuit can be unmade by dismissal. Only statute survives an election.

The fight for jurisdiction continues

The reversal has not settled the underlying question of which authority controls crypto markets. The SEC and the Commodity Futures Trading Commission still share an ill-defined boundary, with tokens that look like securities in one context and commodities in another. Congress is working on two pieces of legislation: a stablecoin framework, which has bipartisan support in the Senate, and a broader market structure bill that would divide oversight between the two agencies. Until those pass, the current accommodation depends on the preferences of appointed officials.

State regulators are another pole. New York's financial regulator, which has licensed crypto firms since 2015, retains its own framework, and several state attorneys general have signaled they will pursue consumer protection cases even as federal enforcement recedes. That creates a patchwork in which the same company may face very different expectations depending on where its customers live.

The international echo

The US turn also changes the global contest over rule-setting. The European Union's MiCA regime became fully applicable at the end of last year, giving Europe a comprehensive licensing system that some firms saw as an advantage while the US was hostile. With Washington now openly courting the industry, the competitive picture looks different. Financial centers such as Singapore, Hong Kong and Dubai, which had marketed themselves as clear-rule alternatives, face a more attractive US market. Meanwhile, international bodies such as the Financial Stability Board and the Financial Action Task Force continue to push for consistent standards on stablecoins and anti-money-laundering controls, regardless of any single country's politics.

Open questions

• Will Congress write the new approach into law, or will it remain dependent on agency leadership?
• How will investor protection be maintained as enforcement resources shift?
• Can conflicts of interest involving officials with crypto business ties be managed credibly?
• Will state regulators fill the gap, creating a fragmented national market?

A pendulum, not a destination

The past three months show how much of US crypto policy was discretionary and how quickly discretion can be redirected. For the industry, the change is a relief and an opportunity. For consumers, it shifts more responsibility onto their own due diligence. For the broader question of who controls finance in a digital age, it is a reminder that the answer depends on legislation that has not yet been written. Until it is, the pendulum can swing back just as fast. None of this should be read as investment advice.