SEC Dropped Most Crypto Cases Under Trump: Lynch
The Trump administration's SEC has dismantled teams responsible for crypto scams and frauds, shut down FinHub, and dropped enforcement actions against major firms including Ripple Labs and Coinbase, House Financial Services Subcommittee ranking member Stephen Lynch said Thursday.
Key Takeaway
Trump's SEC gutted crypto enforcement—no lawsuits, no fraud teams, leaving the market essentially unpoliced.
Massachusetts Representative Stephen Lynch told a congressional hearing Thursday that the SEC has no cop on the beat for crypto anymore.
The ranking member of the House Financial Services Subcommittee on Digital Assets said the Trump administration dismantled several teams responsible for managing crypto scams and frauds. The White House also shut down FinHub, the SEC's dedicated office for building technical expertise on digital assets and fintech. Lynch said the commission dropped enforcement actions against Ripple Labs and Coinbase. Some Coinbase executives have close ties to the Trump administration.
The shift followed Gary Gensler's January 2025 departure as SEC Chair. Trump appointed Paul Atkins as his replacement. Under Gensler, the SEC filed lawsuits against Binance and Coinbase and expanded securities definitions to include specific digital assets without clear classification frameworks. His approach relied on enforcement rather than guidelines. The commission's overall enforcement actions fell 26% in fiscal 2024 to 583 total cases, the lowest in a decade.
Subcommittee Chair Bryan Steil questioned whether regulators were prepared to meet the moment on digital assets. He said Congress must provide clarity and eliminate fragmentation and uncertainty. The remarks came as lawmakers debate whether a legal standard developed in 1946—the Howey Test—still works for decentralized digital assets. Congress has stalled on passing the CLARITY Act, which would establish formal crypto classification rules.
SEC Chair Paul Atkins said the SEC's approach would serve as a bridge to clarify crypto regulation while Congress remains gridlocked. The commission signed a memorandum of understanding with the CFTC in March 2026 on digital asset oversight. Lynch said he embraced the idea that innovative technology could be used for tremendous good, but criticized the current enforcement vacuum. In fiscal 2024, the SEC logged 124 orders barring individuals from director or officer roles, the second-highest in a decade.
This article was written based on reporting from Cointelegraph.
