Crypto Regulation and Investor Safety

• The Commission is highly interested in the matter where products are recommended to investors without giving much information about the same. 

• SEC has taken legal actions against various big companies running in the crypto world, commonly quoting the sale of unregistered securities.
• In the priorities report 2025 of SEC it is mentioned that investigations will be mainly centered at how registrants like investment advisors think about crypto assets and how they manage it. 

The SEC has unveiled its future plans for the next year, the priority has been given to position crypto assets under regulatory microscope. This shows the continuing efforts of the Securities and Exchange Commission to maintain transparency and provide safety to the investors in this sector where risk is also increasing rapidly.  

Due to increasing risk, the role of SEC to implement various regulations and to oversee the operations of investment advisors becomes very important. 

In the priorities report 2025 of SEC it is mentioned that investigations will be mainly centered at how registrants like investment advisors think about crypto assets and how they manage it as well. One more target is to find out if the companies are sticking to the fiduciary duties or not, mainly in the matter of retail investors and retirement savings. 

SEC is surrounded by controversies 

The Commission is highly interested in the matter where products are recommended to investors without giving much information about the same. 

In the last ten years, the Securities and Exchange Commission periodically attracts controversies, mainly in the matter of cryptocurrency, lawmaking and giving public statements.  At times, SEC has backed a lot of crypto companies, at the same time taken against many firms due to some misconduct. 

After various debates over years, the first Bitcoin futures ETFs got acceptance in 2021. Due to this, many institutional investors got the opportunity to explore Bitcoin in a defined regulatory framework. 

The Commission has also developed guidance related to Initial Coin Offerings (ICOs) as well as token offerings which eventually helped various companies to understand how to issue virtual assets following the security laws. At the same time, it is a debatable topic, but the guidance helps the companies as it works as a roadmap navigating to work within boundaries. 

Legal actions by SEC for not complying with the policies 

SEC has taken legal actions against various big companies running in the crypto world, commonly quoting the sale of unregistered securities or a big failure in complying with the policies. 

One of the cases that was in the limelight for a long period of time was SEC Vs. Ripple Labs. In December 2020, SEC filed a case mentioning that the sale of Ripple’s XRP tokens holds an unregistered securities offering. 

The commission has also done a settlement of about $100 million in February 2022 with BlockFi, a digital asset lender. In this case, the SEC has accused BlockFi that it hasn’t registered its lending product. 

Not only this, but major exchanges have also been sued by the SEC for listing unregistered securities as well as not giving required information to customers about risks linked with some of the virtual tokens. 

However, these companies have tried their best to work as per the U.S. laws, the commission is still working on its operations and looking to fix various issues revolving around the crypto industry.