The Securities and Exchange Commission has dropped lawsuits against two crypto companies.
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The regulatory environment for US digital assets is shifting at an unprecedented rate, and it is impossible to ignore the political upheavals that drive these changes. Within weeks of President Trump’s inauguration, Coinbase announced on Friday that the Securities and Exchange Commission had dropped its 2023 lawsuit against the company, and Robinhood Crypto on Monday had no enforcement action. It has been revealed that it has been closed.
The SEC itself has not issued an official statement confirming these decisions, but the company’s announcements send shockwaves through the industry in the form of long-awaited relief, dramatic from the Biden administration and anti-antibody enforcement heavy approach. It shows a reversal. Cryptographic rhetoric by leading council and agency leaders. This is amid wider structural changes, including the formation of a new cryptographic task force within the SEC and the appointment of pro-crypto leadership, all of which are Trump’s campaign to make America the “crypto capital of the world.” We are working together.
But beyond regulatory relief, what we are witnessing is the crypto industry’s most important return on investment in reshaping Washington’s power dynamics. Public Citizens report shows that over $110 million of political contributions and political contributions in the 2024 election cycle, and almost half of the 2024 election cycle, the industry is currently in strategic political alignment. You are enjoying the rewards of.
What about regulatory relief or political support?
The SEC’s past enforcement approach, particularly under former chairman Gary Gensler, was defined by securities law litigation and aggressive interpretation. The agency filed lawsuits against Coinbase, Binance, Kraken and Robinhood, alleging that the companies provided unregistered securities and violated federal law. The Crypto industry has long criticised this approach as enforcement regulation, suppressing innovation, and regulating business offshore.
Now, when the Coinbase and Robinhood cases seem to be resolved, the problem is that this change has heavily invested in reshaping the government’s attitude towards crypto. Or whether it represents a long-term revision to strategic political favor.
It is impossible to ignore the timing. An announcement regarding Coinbase’s SEC lawsuit’s termination comes days after the company revealed that Trump’s former co-campaign manager, Chris Lacivita, has been appointed to the Global Advisory Council. This raises an important question:
Did Coinbase’s direct relationship with Trump’s inner circle ensure favorable regulatory outcomes? Will companies that do not match the challenges of government continue to monitor? Are cryptography regulations currently determined by political loyalty rather than legal and financial oversight?
Regulatory policy and politics
Unlike cabinet positions that serve the joy of the president, agencies like the SEC are independent by design. In other words, their leadership is not expected to be transferred to all administrations. The SEC commissioner has shifted its term of five years and can only be removed for reasons. However, recent weeks have shown how political appointments, policy reversals and internal restructuring will affect regulatory independence.
Under the Trump administration, the SEC has already done:
It has revoked previous crypto-related guidance, including accounting rules for staff that made it difficult for businesses to engage in banking. As the next chair, he accumulated leadership in pro-cryptic voices, including the predicted nominations of longtime critic of the SEC’s Enforcement Approach. To draft industry-friendly regulations, we created a dedicated cryptographic task force led by Commissioner Hester Perth (known as “cryptomamas”).
If crypto companies can avoid long-standing litigation by simply shifting political alliances, what does that mean for regulatory certainty, fair enforcement, and independent institutional integrity?
100 million dollar Washington Power Play
The crypto industry’s financial contributions to the 2024 election cycle surpassed all other sectors, with half of all corporate contributions coming from crypto companies. This investment wasn’t just about the campaign contribution. It was to ensure policy impact at the highest level of government.
As a result, more than 250 pro-cryptic candidates were elected to Congress, along with 16 pro-cryptic senators. The face of the SEC is not just a regulatory change. It is a clear signal that political investment in the industry is paying off. Additionally, while the SEC’s regulatory shift controls headlines, Congress is also moving quickly to restructure the legal framework of digital assets. One of the top priorities is Stablecoin regulations, including competing bills in both the House and Senate.
The whole picture of the crypto industry
As the Trump administration moves aggressively to restructure its digital asset policy, the key issue is that these fast and unpleasant changes will thrive in a long-term, transparent regulatory framework that will thrive in all seasons. It’s about whether it’s connected or not. Or whether regulation clarity is a transaction and creates a precedent that changes with political power?
If the crypto industry finds only regulatory relief under Republican leadership, it risks further politicization of financial regulations, leading to uncertainty in any election cycle.
For Democrats, this moment presents a challenge. There is a risk of ignoring crypto and losing influence over one of the fastest growing financial sectors. Or commit to developing a bipartisan framework that offers clarity, opportunity and protection without giving away the American narrative and stifling innovation.
For crypto companies, lessons are clear. The rules of the game have changed, but they are deeply political. However, regulation certainty is still uncertain unless it is built on a bipartisan, legitimate foundation rather than political manipulation. Long-term stability depends not only on the White House, but also on ensuring Congress (with constitutional law and oversight authority) that leads digital asset policy.
Long-term stability or short-term strategies?
The SEC reports reported at Coinbase and Robinhood show a critical moment in the evolution of cryptographic regulations. However, it remains to be seen whether this change represents a step towards lasting clarity or a dangerous precedent for regulatory support.
Congress will drive new laws, the White House will work with industry players, and crypto companies will be shaped the long-term trajectory of US digital assets for the next four years as they work with crypto companies to embed deeply in their political strategy
Is this the dawn of an era of stable, transparent regulation of codes? Or is the industry simply the latest power player in Washington’s high stakes political games?
