By The Securities and Exchange Commission’s dropping of its lawsuit against Coinbase and its investigation into Robinhood’s crypto business are laying the groundwork for a major regulatory regime change, sources said.
The first sign that the winds of change were blowing came on Friday, when Coinbase, the largest US crypto exchange, said the agency was dropping its lawsuit claiming it was an unregistered brokerage. The message of looser regulation was strengthened after Robinhood said Monday that the SEC would end its investigation into its crypto unit.
And there’s likely more change on the horizon, most of it beneficial for the market. From regulatory change to new crypto-specific policy from lawmakers, here are three things industry experts say to watch as a new era for crypto unfolds.
1. The SEC could end more lawsuits
Sources predicted that regulators are likely to drop other lawsuits and investigations initiated by the previous administration. Zack Shapiro, the head of policy at the Bitcoin Policy Institute, pointed to the SEC’s ongoing cases against Binance and Kraken, two crypto exchanges targeted by regulators for reasons similar to the Coinbase suit.
“It’s hard for me to see how they’re not going to also get rid of the Binance and Kraken cases, which are substantial, the same theory that they’re going after Coinbase,” Shapiro said.
Amy Lynch, a regulatory expert and the founder of FrontLine Compliance, said the SEC is likely trying to shape its own precedent regarding crypto regulation. She added that she expects most crypto assets to be regulated like commodities and, therefore, outside the purview of the SEC going forward.
The case to watch in this space is the SEC’s suit against Ripple Labs, the issuer of the XRP altcoin. The SEC said in its lawsuit that Ripple’s sale of XRP tokens was an unregistered securities offering. Importantly, the case was regarded as the legal underpinning that would have classified most cryptos as securities under the oversight of the SEC.
The case has moved slowly, with the SEC appealing a previous court decision last October. It remains to be seen whether the agency will continue to pursue its appeal in the Trump era.
More broadly, enforcement of securities law could also be “severely reigned in,” partly due to the influence of Department of Government Efficiency, Lynch said, speculating that DOGE could take a closer look at the inner workings of the SEC and try to streamline the agency.
“I think they want to take time out to develop their own game plan,” Lynch said of SEC. “I think current cases that are pending based on positions that the previous staff had are going to end up being dropped.”
2. Lawmakers could pass a regulatory framework for crypto
Shapiro said he thinks lawmakers are only a few years away from passing a market structure bill, which could rewrite securities law to essentially give crypto tokens a free pass.
Congress also looks on track to pass a stablecoins bill within the next few months, Shapiro added. He pointed to David Sacks, the White House crypto czar, who said recently that the Trump administration was prioritizing a bill that would deal with rules around stablecoins, which are cryptocurrencies pegged to fiat money. The White House sees such a move as important for upholding the dominance of the dollar.
Of the new developments Trump has proposed — like his plan to create a national bitcoin stockpile — Shapiro has the “highest confidence” that a stablecoins bill will be passed this year, told BI.
3. Crypto prices could see fresh volatility
With such big changes comes the possibility of heightened volatility.
Lynch and Shapiro are eyeing the possibility that crypto prices will see more volatility this year.
If Congress pursues crypto-focused legislation, that could cause a negative shock to crypto prices, Lynch said, pointing to previous instances when crypto prices dipped in response to changes in the legal frameworks.
“There could be a shock to a system, and prices could go down. But again, if that happens, they will also rebound and go back up,” she speculated.
Shapiro sees potential for more positive momentum once new legislation is passed. He predicted fresh institutional interest in crypto once a stablecoin bill is hashed out.
“I’m sure all of the banks would like to do this and compete with Tether, but there’s not enough regulatory clarity. So once Congress has the stablecoin bill, that’ll probably bring a lot of money in,” he said.
