Cryptocurrencies have once again been included in the United States Securities and Exchange Commission’s (SEC) list of priorities for examination in 2025. This comes irrespective of potential forthcoming changes in its leadership or governmental control.
On October 21, the SEC’s Division of Examinations publicized its 2025 priorities. Among listed priorities were crypto assets and associated services and products. The regulator revealed plans to focus on the activities related to the offering, trading, advising, and recommendation of crypto assets, specifically spot Bitcoin and Ether exchange-traded products.
Due to the inherent volatility and activity in the cryptocurrency markets, the Division intends to keep a close eye on, and conduct examinations of, registrants offering services related to crypto assets as and when necessary. The Division plans to evaluate the practices employed by registrants to tackle technological risks associated with blockchain and distributed ledger technology.
Keith Cassidy, the SEC’s Acting Director of the Division of Examinations, stated that the priorities pinpoint “areas of potentially increased risks and harm for investors”, indicating that the SEC’s approach to digital assets will likely remain unchanged in 2025. SEC Chair, Gary Gensler expressed that the Division’s aim is to help participants understand the regulations, with an emphasis on investor protection and capital formation.
The scrutiny of spot crypto ETFs reflects a shift from the regulator’s 2024 priorities. It’s worth noting that the SEC approved the spot Bitcoin ETFs in January and later, the spot Ether products in May.
While Gensler’s tenure is slated to end in June 2026, experts believe that he may step down in January 2025 with the onset of a new presidential administration. The SEC under Gensler has faced criticism for its “regulation by enforcement” approach towards cryptocurrencies. The commission has filed several lawsuits against crypto firms, accusing them of unregistered securities offerings, including pending cases against Coinbase, Ripple, and others.