How SEC Crypto Enforcement Actually Works

“SEC enforcement” gets used as a catchall phrase for almost anything the agency does, from a single social media post about a paused investigation to a jury verdict worth more than four billion dollars. That looseness makes it hard to understand what is actually happening in any given week of crypto news. A Wells notice is not a lawsuit. A closed investigation is not an acquittal. A dismissal “with prejudice” means something very different from a case that simply goes quiet for a year. This explainer works through the mechanics: what the SEC’s Division of Enforcement actually is, how a case moves from a tip to a judgment, why the Howey test keeps deciding whether a token counts as a security, and how the agency’s posture swung from Gary Gensler’s “regulation by enforcement” era to Paul Atkins’ rulemaking-first approach.

The timing matters. This month the SEC is expected to open formal, notice-and-comment rulemaking on a crypto safe harbor for the first time, following eighteen months in which it dismissed its marquee cases against Coinbase, Binance and Ripple Labs, closed investigations into more than a dozen other firms, and cut digital-asset penalties by well over 90 percent year over year. For a detailed rundown of exactly what changed and when, see our companion piece on what actually changed at the SEC in 2026. This piece is about the underlying machine: the rules, the precedents, the votes, and the people who are about to decide what happens next.

What “SEC Enforcement” Actually Means

The SEC is not a court and it is not a police department. It is a civil regulator created by the Securities Act of 1933 and the Securities Exchange Act of 1934, and its Division of Enforcement exists to investigate possible violations of those laws and the rules written under them, then decide whether to act on what it finds. It has no power to put anyone in prison; when investigators uncover conduct that looks criminal, they refer it to the Department of Justice, which runs its own parallel process. What the SEC can do on its own is civil: sue in federal district court, or, since a 2024 Supreme Court ruling changed the calculus, bring a shrinking number of matters before its own in-house administrative law judges.

That 2024 case, SEC v. Jarkesy, held 6-3 that the Seventh Amendment entitles defendants to a jury trial whenever the SEC seeks civil penalties for fraud, which pushed a large share of contested enforcement work out of internal administrative proceedings and into federal court, with all the discovery, delay and jury unpredictability that implies. It is one reason settlements, where a company neither admits nor denies wrongdoing but agrees to pay and comply, remain the path of least resistance for both sides.

The remedies the SEC can actually extract are narrower than headlines suggest. A court or an administrative order can impose an injunction (a promise not to break the law again, backed by contempt power), disgorgement (giving back ill-gotten gains, plus interest), a civil monetary penalty (a punitive fine on top of disgorgement), and bars on serving as an officer, director, or securities professional. What enforcement cannot do is write new rules. That distinction, acting after the fact versus defining terms before it, is the entire story of how crypto regulation has moved over the last eighteen months: away from suing first and litigating definitions in court filings, toward trying to set the terms in advance through formal rulemaking.

Inside an SEC Case: From Tip to Judgment

Most matters start with a tip. In fiscal year 2025 the agency’s whistleblower program logged 53,753 tips, complaints and referrals, and paid out roughly $60 million in awards to 48 whistleblowers, on top of about $262 million returned to harmed investors, according to the SEC’s own fiscal year 2025 enforcement results. Whistleblowers who provide original information leading to a sanction of $1 million or more can collect between 10 and 30 percent of what is recovered, a meaningful incentive in an industry where insiders often know about problems long before regulators do.

If a tip or a routine exam turns up something worth pursuing, staff open an investigation, often under a formal order that gives them subpoena power to compel documents and testimony. If that investigation points toward charges, the target receives a Wells notice: formal written notice that staff intends to recommend an enforcement action to the five-member Commission, not a charge in itself. Recipients get a window to respond in writing, arguing why the Commission should decline to act. Atkins has widened that window since taking over, promising a baseline four-week response period, broader access to the investigative record, and the ability to request meetings with senior staff, changes aimed at a longstanding complaint that the old process felt like being served a verdict dressed up as a warning.

Only the Commission itself, voting as a body, can authorize charges. Once authorized, staff can file in federal district court or bring an administrative cease-and-desist proceeding, and the overwhelming majority of matters end in settlement rather than trial, because litigating a securities case to judgment is slow and expensive for everyone involved. That process, tip, investigation, Wells notice, Commission vote, settlement or suit, is the same one that decided the outcome for Coinbase, Ripple and Terraform Labs alike. What changed after 2025 was not the machinery. It was who was pulling the levers, and what they were willing to authorize.

The Howey Test: The 80-Year-Old Rule Running Crypto Law

Every argument about whether a token is a security eventually traces back to a 1946 Supreme Court case about Florida citrus groves. SEC v. W.J. Howey Co. held that an “investment contract”, and therefore a security, exists when there is:

• An investment of money
• In a common enterprise
• With a reasonable expectation of profit
• Derived from the efforts of others

Congress never wrote a crypto-specific definition into the securities laws, so for most of the last decade the SEC’s entire theory of the case rested on stretching those four elements over blockchain tokens. It mostly worked, at least in front of judges. Courts found that Kik Interactive’s 2017 sale of Kin tokens met the Howey test because purchasers paid money into a common pool that funded Kik’s efforts to build value into the token. Telegram’s plan to distribute Gram tokens, funded by a token sale worth roughly $1.7 billion, was blocked on similar reasoning before it ever launched. A federal court ruled that LBRY’s LBC token was a security in 2022, leaning heavily on the company’s own marketing, which had promised buyers a return.

Ripple Labs broke that streak, or at least complicated it. In 2023, Judge Analisa Torres ruled that XRP itself is not inherently a security, but that specific transactions could be: institutional sales made directly to sophisticated investors under a written contract satisfied Howey, while the same token sold “programmatically” through blind exchange order books to retail buyers, who had no idea whose money was funding what, did not. That split survived Ripple’s eventual settlement, and it is the direct ancestor of the framing the SEC adopted in 2026: that most crypto assets are not themselves securities, but the way they are sold sometimes is. It took the agency three more years and a change of leadership to say that plainly.

From Gensler to Atkins: A Regulatory Pivot in Two Acts

Gary Gensler ran the SEC from April 2021 until he stepped down as the new administration took office in January 2025, and crypto enforcement was a defining feature of his tenure. Under Gensler the agency brought 125 crypto-related enforcement actions and imposed $6.05 billion in monetary penalties, compared with 70 actions and $1.52 billion under his predecessor Jay Clayton, according to a Cornerstone Research analysis of the agency’s own data. Industry critics called the approach “regulation by enforcement”: suing first and letting the resulting settlements and court rulings function as de facto rules, since the Commission rarely finished a crypto-specific rulemaking that stuck.

The pivot started almost immediately after the administration changed. Mark Uyeda, installed as acting chair in January 2025, moved fast: within days the Commission rescinded Staff Accounting Bulletin 121, the guidance that had forced banks to book customers’ crypto holdings as balance-sheet liabilities, replacing it with SAB 122. President Trump signed an executive order on digital financial technology that same week, and the Commission stood up a Crypto Task Force on January 21, 2025, led by Commissioner Hester Peirce, tasked with drawing an actual regulatory roadmap instead of litigating one case at a time.

Paul Atkins was sworn in as chair that April, and the enforcement side reorganized to match the new priorities. The old Crypto Assets and Cyber Unit was replaced by a Cyber and Emerging Technologies Unit, roughly 30 fraud specialists led by Laura D’Allaird, explicitly refocused on fraud involving blockchain and artificial intelligence rather than the registration theories that had driven most Gensler-era crypto cases, per the SEC’s own unit announcement. Meg Ryan became the Division of Enforcement’s director in September 2025. The infrastructure built to pursue crypto companies over how they sold tokens was, in effect, dismantled and rebuilt around catching people who were simply lying to investors.

The Great Unwinding: Every Major Case the SEC Dropped in 2025

By the end of 2025 the SEC had ended enforcement matters against at least 17 firms, a list that reads like a roster of the industry’s biggest names. Coinbase went first: the Commission voted to end its case in late February 2025, and the parties filed a joint dismissal on February 27, formally closing a lawsuit that had accused the exchange of operating as an unregistered securities exchange, broker and clearing agency, per the SEC’s own dismissal notice. Coinbase’s chief legal officer Paul Grewal did not hide his satisfaction, writing that “we’ve always maintained that we were right on the facts and the law, and today’s announcement confirms that this case should never have been filed in the first place”, in a company blog post titled, pointedly, “Righting a major wrong.”

Kraken, ConsenSys and Cumberland DRW followed in late March. Binance and its founder Changpeng Zhao got their case dismissed with prejudice on May 29, 2025, ending a lawsuit first filed in June 2023 and closing out what had already been, separately, a $4.3 billion Department of Justice settlement in which Zhao pleaded guilty and stepped down as chief executive back in November 2023, according to CNBC’s reporting. Ripple Labs took the longest to fully close: the original $125,035,150 penalty against its institutional XRP sales, entered in August 2024, stayed on the books, but both sides dropped their competing appeals in August 2025 rather than risk a worse outcome from a higher court. Investigations into Robinhood, Uniswap Labs, OpenSea, Gemini, Crypto.com, Yuga Labs, Immutable, Helium, PayPal, Aave and Ondo Finance were all closed without any charges being filed at all. For a closer look at how the exchanges named here now operate, see our comparison of Coinbase, Binance, Kraken and OKX.

Fraud Is Still Fraud: What the SEC Still Prosecutes

This is the part of the story that gets lost in “SEC retreats from crypto” headlines: the agency did not stop bringing crypto cases, it narrowed what kind of crypto case it brings. Registration theory, the argument that a token sale itself was an unregistered securities offering, mostly went away. Outright fraud did not.

The clearest example predates the pivot but still defines the line. In April 2024 a jury took less than two hours to find Terraform Labs and its founder Do Kwon liable for securities fraud over the collapse of the algorithmic stablecoin UST, which erased roughly $40 billion in value when it de-pegged in May 2022. Terraform and Kwon ultimately agreed to pay $4.47 billion in disgorgement, interest and penalties, one of the largest settlements in SEC history, according to the Commission’s own release. Nobody in Washington has proposed giving that case back.

The pattern has continued into 2026. The SEC charged Nathan Fuller with a $12.3 million fraud built on fabricated AI trading bots and fake account statements. It pursued Ramil Palafox and PGI Global over a $198 million scheme that promised guaranteed returns from crypto and foreign exchange trading, while Palafox allegedly diverted more than $57 million for himself. CryptoFX, Unicoin and a string of smaller Ponzi-style operations round out a docket that looks a lot like traditional financial fraud enforcement that happens to involve wallets instead of bank accounts. The Cyber and Emerging Technologies Unit’s entire design reflects this shift: fewer lawyers arguing about whether a token sale needed a registration statement, more investigators chasing people who lied about what they were selling.

That split, enforcement after harm versus prevention before it, also explains why so much of crypto’s actual security work now happens outside the SEC entirely. Exchanges and protocols increasingly rely on bug bounty programs to catch problems before an enforcement docket ever needs to open, since a disgorgement order arrives long after a hack has already drained a protocol.

Project Crypto and the Token Safe Harbor

If 2025 was about closing cases, 2026 is supposed to be about opening rulemakings, which is where this explainer gets genuinely current. Atkins first unveiled “Project Crypto” in a July 2025 speech, then used a November 2025 keynote to describe an effort to modernize securities rules so markets can move on-chain, an updated taxonomy for when a token counts as a security, and something he called an “innovation exemption.” In January 2026 the initiative formally became a joint effort with the Commodity Futures Trading Commission: Atkins and new CFTC Chair Michael Selig, who had previously served as chief counsel to the SEC’s own Crypto Task Force before crossing the street, announced they would harmonize the jurisdictional lines between the two agencies rather than let market participants guess which regulator’s rules applied.

The most concrete step came on March 17, 2026, when Atkins used a speech titled “Regulation Crypto Assets: A Token Safe Harbor” to lay out three components:

• A time-limited startup exemption letting developers raise up to $5 million over as long as four years, with lightweight, whitepaper-style disclosure instead of a full registration statement
• A separate fundraising exemption allowing larger raises, up to $75 million, through qualifying crypto investment contracts
• A broader investment-contract safe harbor meant to give issuers and buyers clarity before a token launches rather than after a lawsuit

Days later the Commission followed up with a formal interpretive release stating plainly that “most crypto assets are not themselves securities,” and that activities like Bitcoin-style mining, staking and airdrops do not, on their own, turn a token into one. “This is what regulatory agencies are supposed to do,” Atkins said. “Draw clear lines in clear terms.”

None of that is binding law yet. Speeches and interpretive releases guide behavior but do not carry the force of a rule adopted through full notice-and-comment. That changes, at least in theory, this month: the SEC’s 2026 Unified Regulatory Agenda lists three separate crypto rulemakings targeting a Notice of Proposed Rulemaking in July 2026, covering crypto asset offerings, broker-dealer capital and customer-protection requirements, and crypto market structure amendments, according to CoinDesk’s reporting on the agenda. Once a proposal is published, it still has to survive a public comment period and a Commission vote before it means anything enforceable, a process that realistically runs into 2027.

Staking Gets a Green Light, Restaking Waits

One of the quieter but more consequential moves came from the SEC’s Division of Corporation Finance rather than the Commission itself. On May 29, 2025, Corp Fin staff concluded that certain protocol staking activities, solo staking, delegated staking, and staking through a custodian, are not securities transactions at all, on the theory that validating a blockchain is administrative and ministerial rather than the kind of entrepreneurial effort Howey cares about. Commissioner Peirce published a companion statement, memorably titled “Providing Security is not a ‘Security’,” while Commissioner Crenshaw dissented from it.

Corp Fin extended the same logic on August 5, 2025, to liquid staking and what it called “staking receipt tokens,” the stETH- or eETH-style tokens that represent a staked deposit and let holders keep using that value elsewhere in DeFi while the underlying asset stays locked and earning rewards. The staff’s reasoning was that a receipt token merely evidences ownership of an already-non-security asset, so wrapping it in a liquid, tradeable form does not change its status, a position laid out in the Commission’s press release on the follow-up statement.

What the guidance pointedly does not cover is restaking: pledging already-staked crypto to secure a second, unrelated system in exchange for extra yield, whether through shared-security protocols or through distributed validator technology networks like the one covered in our explainer on SSV and based applications. Once a token’s return depends on the performance of some other protocol layered on top of the base stake, the “purely administrative” argument gets harder to make, and both staking statements are staff-level views, not Commission rules, meaning they can be withdrawn and do not bind a court. Liquid restaking tokens sit squarely in that gap: legally uncharted, economically enormous, and one bad incident away from becoming the next test case.

From Courtrooms to Listing Standards: Crypto ETPs

Spot Bitcoin ETFs took until January 2024 to reach market, and only after years of individual rejections and a successful lawsuit, Grayscale’s 2023 win over the SEC in the D.C. Circuit, forced the Commission’s hand. Even then, Gensler was blunt that approval was not an endorsement, framing it as a case-by-case reaction to a specific legal defeat rather than a policy the agency actually favored.

September 2025 replaced that one-off model with a standing rulebook. The SEC approved generic listing standards for commodity-based exchange-traded products on NYSE Arca, Nasdaq and Cboe BZX, meaning a new crypto ETP no longer needs its own individual rule-change filing if the underlying asset already trades on an established futures market. Commissioner Peirce called the move “a special generic,” while Commissioner Crenshaw dissented, arguing the Commission was outsourcing investor-protection judgments to futures exchanges. Grayscale’s Digital Large Cap Fund, holding Bitcoin, Ethereum, XRP, Solana and Cardano together, became the first multi-asset crypto ETP to trade in the United States days later, launching on NYSE Arca under the new framework.

The practical effect is that crypto ETPs now clear in weeks rather than years, provided the underlying assets already have a listed futures market, exactly the kind of infrastructure the CFTC, not the SEC, oversees, and another reason the two agencies formalized their coordination in early 2026. It also raises a question that has nothing to do with securities law and everything to do with operations: who actually holds the coins backing these funds. Custody arrangements for a spot ETP look very different from a self-custodied wallet or an exchange account, a distinction covered in more depth in our comparison of crypto custody models.

The Legislative Backdrop: GENIUS Act, CLARITY Act, and the Senate Logjam

Enforcement and rulemaking can only do so much without Congress, and 2025 and 2026 produced the two biggest pieces of crypto legislation the country has seen. President Trump signed the GENIUS Act on July 18, 2025, creating the first federal framework for payment stablecoins: issuers must back tokens one-to-one with cash or short-term Treasuries, publish monthly reserve disclosures, and the tokens themselves are explicitly defined as neither securities nor commodities. Its effective date is the earlier of eighteen months after signing or 120 days after regulators finalize implementing rules, which in practice points toward late 2026 or early 2027, with federal and state regulators working through their own rulemakings on a parallel track this year.

The bigger prize, market structure legislation that would formally divide crypto oversight between the SEC and the CFTC, has had a rougher ride. The Digital Asset Market Clarity Act passed the House by a wide 294-134 margin in July 2025, with more than 70 Democrats crossing over, and the Senate Banking Committee advanced its own version 15-9 in May 2026. As of early July 2026 the bill sits on the Senate’s legislative calendar with no floor vote scheduled, stuck behind three disputes: a fight over criminal-investigation protections that prosecutors say would hamper fraud cases; a disagreement over whether stablecoin issuers and platforms, Coinbase alone earns an estimated $1.35 billion a year from USDC-related rewards, can keep offering yield-like payments without those payments counting as securities; and fresh ethics objections after President Trump’s July 1, 2026 financial disclosure showed roughly $1.4 billion in crypto-related income during 2025, including proceeds tied to the $TRUMP memecoin and World Liberty Financial token sales, as CoinDesk has documented in its coverage of the bill’s stalled path.

The Senate returns from recess on July 13 with roughly three working weeks before August recess, a window lobbyists on both sides describe as the last realistic chance for passage this year. If it slips again, market structure legislation likely waits until 2027.

The Justin Sun Problem: Where Discretion Becomes Controversy

Nothing illustrates the risk of an enforcement agency having wide discretion quite like the case the SEC spent over a year not quite finishing. The Commission charged Justin Sun, the founder of Tron, in March 2023 with fraud, wash trading and running an unregistered securities offering through the TRX and BTT tokens. The case went quiet in early 2025, not long after Sun invested a combined $75 million into World Liberty Financial, the Trump family-linked crypto venture, and took on an advisory role there.

That timing did not go unnoticed. At a House Financial Services hearing on February 11, 2026, lawmakers including Maxine Waters, Brad Sherman and Sean Casten pressed Chair Atkins directly on whether the pause amounted to pay-to-play, an accusation Atkins rejected. Roughly three weeks later, on March 5, 2026, the parties filed a proposed final judgment: Rainberry Inc., the BitTorrent-linked corporate entity, agreed to pay a $10 million civil penalty and accept a permanent injunction, while every claim against Sun personally, the Tron Foundation and the BitTorrent Foundation was dismissed with prejudice, meaning the SEC gave up the right to ever refile them, according to CoinDesk’s report on the settlement.

The relationship that reportedly triggered the pause has since curdled into a separate legal fight of its own: Sun sued World Liberty Financial in April 2026 alleging his tokens, worth roughly $240 million, were frozen and his voting rights blocked, and World Liberty countersued for defamation the following month. None of that is SEC business, but it underlines the same point the original hearing raised: when a regulator has broad discretion over which cases move fast, which sit quietly for a year, and which get dismissed with prejudice, the people making those calls will be asked to explain their reasoning, especially when the defendant’s business partners include the president’s family.

A Commission Running on Empty

The SEC is designed to run with five commissioners, no more than three from one political party, precisely so that enforcement decisions reflect more than one point of view. For most of 2026 it has not worked that way. Caroline Crenshaw, the Commission’s sole Democrat, left when her term expired on January 2, 2026, leaving an all-Republican panel for the first time in the agency’s modern history. She did not go quietly: her February 2025 dissent from the Coinbase dismissal, titled “Crypto 2.0: Regulatory Whiplash,” argued the majority’s reasoning “ignores 80 years of well-established law,” a position she restated in even sharper terms months later, describing the Ripple settlement as “the programmatic disassembly of the SEC’s crypto enforcement program.”

The panel is about to get thinner still. Hester Peirce, the Crypto Task Force’s chief architect and its public face since January 2025, announced in May 2026 that she will leave the Commission in November 2026 to join Regent University’s law school faculty, according to reporting on her exit. Once she departs, only Atkins and Uyeda will remain as sitting commissioners on a body built for five, an unprecedented gap that leaves the industry’s most crypto-literate internal voice without a confirmed successor; trade press has floated names like Senate Banking counsel Ammon Simon and SEC senior legal advisor Jennifer Schulp, but nothing is settled.

A commission with only two sitting members can still take some actions, but it raises real questions about legitimacy and continuity right as the agency tries to push three separate crypto rulemakings through notice and comment. Peirce spent part of her farewell remarks comparing parts of the SEC’s own process to an “escape room,” a jab at the very bureaucracy she is leaving behind mid-puzzle.

The FY2025 Scorecard, By the Numbers

Add up the individual stories and a pattern emerges in the aggregate numbers too. The SEC’s own accounting for fiscal year 2025, October 2024 through September 2025, released in April 2026, shows an agency that is still active but has clearly redirected its energy. The headline $17.9 billion in monetary relief looks enormous until you notice that $14.9 billion of it came from a single, unrelated 2009-era judgment in the Robert Allen Stanford Ponzi scheme case; strip that out, along with amounts already satisfied through parallel criminal cases, and the real FY2025 total is closer to $2.7 billion, split roughly $1.4 billion in disgorgement and interest and $1.3 billion in civil penalties, per the Commission’s own release.

The crypto-specific slice of that shrank even faster than the whole. Digital-asset penalties totaled about $142 million for the year, under 3 percent of what the agency collected from crypto defendants in fiscal 2024, when the Terraform Labs case alone accounted for most of the difference. Crypto-related actions fell to 13 from 33 the year before, a 60 percent drop, and five of those 13 were actually filed before Gensler left office in January 2025, meaning barely eight new crypto cases originated under the entire new leadership across a full fiscal year, according to Cornerstone Research’s analysis of the numbers.

What Comes Next

Three things will determine whether 2026 is remembered as the year crypto got real rules or just another year of favorable speeches. The first is whether the SEC’s promised rulemakings, on token offerings, broker-dealer requirements and market structure, actually get published this month as scheduled and survive the comment period substantially intact, rather than getting watered down or delayed the way similar efforts have in the past. The second is whether the CLARITY Act clears the Senate’s narrow three-week window before August recess; if it slips again, market structure legislation likely waits until 2027, an election-adjacent year when appetite for complex financial bills tends to shrink. The third is more personal than procedural: who replaces Hester Peirce, and whether that successor keeps pushing rulemaking at the same pace once the person who built the Crypto Task Force from scratch is teaching securities law in Virginia instead of running it.

None of this happens in a vacuum. The CFTC under Michael Selig is moving in parallel on digital commodities, and how well it cooperates with a thinner, more Republican SEC will shape how cleanly authority actually splits between the two agencies. Retail investors and builders alike are left reading speeches and interpretive releases as though they were binding law, because until the formal rules exist, that is functionally what they are. The safest assumption for anyone building in this space is the same one that has applied since Howey was decided in 1946: the label on a token matters less than how it is actually sold, who profits from that sale, and whether a regulator with subpoena power thinks investors were misled. Everything else, including which administration happens to be in charge, is detail.

Frequently Asked Questions

Is cryptocurrency a security according to the SEC?

Not automatically. Since a March 2026 interpretive release, the SEC’s official position is that most crypto assets are not themselves securities. What can make a transaction a security is how it is sold, for example an institutional sale backed by promises of profit from a company’s efforts, even when the underlying asset is not. Bitcoin mining, staking rewards and airdrops are explicitly excluded from securities treatment under current SEC guidance, though that guidance is not yet a binding rule.

What is the Howey test?

The Howey test comes from a 1946 Supreme Court case, SEC v. W.J. Howey Co., and asks whether an arrangement involves an investment of money in a common enterprise with a reasonable expectation of profit derived from the efforts of others. If all four elements are present, US law treats it as a security subject to registration and disclosure rules, regardless of what it is called. It remains the primary test regulators and courts apply to crypto tokens.

Did the SEC drop its cases against Coinbase and Ripple?

Yes, with an important difference between them. The SEC dismissed its Coinbase lawsuit entirely in February 2025. Ripple’s outcome was narrower: the SEC and Ripple dropped their competing appeals in August 2025, but the original $125 million penalty against Ripple’s institutional XRP sales, entered in 2024, remained in place. Programmatic sales to retail buyers through exchanges were never found to be securities transactions in the first place.

What is the SEC’s Project Crypto?

Project Crypto is Chair Paul Atkins’ initiative, launched in mid-2025 and run jointly with the CFTC since January 2026, to replace case-by-case enforcement with formal rules for digital assets. It includes a proposed token safe harbor with time-limited exemptions for startups and larger fundraises, plus three rulemakings covering token offerings, broker-dealer requirements and market structure that the SEC targeted for formal proposal in July 2026.

Can crypto staking still get a company sued by the SEC?

Current SEC staff guidance says no for straightforward protocol staking, whether solo, delegated or through a custodian, and extends that shelter to liquid staking receipt tokens such as stETH-style assets. It does not clearly cover restaking, where already-staked crypto secures a second protocol for extra yield. That guidance is staff-level, not a Commission rule, and could still change.

Written by the HOGE Wire regulation desk.