SEC (Securities and Exchange Commission)

The Securities and Exchange Commission is now led by its 34th Chairman, Paul S. Atkins — confirmed April 9, 2025 and sworn in April 21, appointed by President Donald Trump — who has declared digital assets the SEC’s “top policy priority.” The Commission’s current all-Republican composition (3-0, with 2 vacancies after Democrat Caroline Crenshaw’s departure in January 2026) marks the most crypto-friendly SEC in history. Between 2021 and 2024, the prior Gensler-led SEC brought 125 cryptocurrency enforcement actions generating $6.05 billion in penalties, but that era has ended: crypto enforcement crashed to just 13 actions in 2025 (60% decline), with the SEC dismissing cases against Coinbase and Binance with prejudice and settling with Ripple for $125 million. The SEC administers the regulatory framework governing approximately two dozen firms with approved digital asset business lines, every broker-dealer in the security token market, and every token offering conducted under Reg D, Reg A+, or Reg S.

Organizational Structure

The SEC operates through five main divisions, each with distinct responsibilities relevant to tokenized securities:

Division of Corporation Finance

Responsible for reviewing registration statements, offering circulars, and periodic filings. For tokenized securities, this division reviews Reg A+ Form 1-A offering statements, processes no-action letter requests through FinHub, and administers the 2019 Framework for digital asset investment contract analysis.

The division’s review of security token offering statements has established detailed disclosure standards covering smart contract architecture, token economics, blockchain selection rationale, key management risks, and forking/airdrop treatment. The INX F-1 registration and numerous Reg A+ qualifications have created a body of staff comment letters that effectively define the disclosure standard for tokenized securities.

Division of Trading and Markets

Oversees securities exchanges, ATS platforms, broker-dealers, transfer agents, and clearing agencies. This division processes Form ATS-N filings from security token trading platforms and administers the special purpose broker-dealer framework that enabled Prometheum’s approval.

Key initiatives include the proposed amendment to Exchange Act Rule 3b-16, which would expand the definition of “exchange” to capture communication protocol systems — potentially requiring some DeFi protocols to register. The division also oversees clearing and settlement for tokenized securities and the application of the Customer Protection Rule to digital asset custody.

Division of Enforcement

Investigates and prosecutes violations of federal securities laws. The division’s Crypto Assets and Cyber Unit (reconstituted as part of the Crypto Task Force in 2025) has brought over 200 digital asset enforcement actions since 2017. Notable cases include Ripple Labs ($125 million), Terraform Labs ($4.5 billion), BlockFi ($100 million), and the ICO enforcement wave that targeted dozens of unregistered token sales.

The enforcement process begins with investigation, proceeds through Wells notices, Commission authorization, and culminates in filed actions — either administrative proceedings or federal court complaints. The SEC whistleblower program has generated over 3,000 digital asset-related tips since 2020, providing a significant enforcement pipeline.

Division of Investment Management

Regulates investment companies and advisers, including tokenized fund structures and digital asset investment vehicles. This division reviews applications for blockchain-based fund products and administers custody rule compliance for advisers holding digital assets.

The division’s approval of BlackRock’s BUIDL tokenized Treasury fund (administered through Securitize) marked a watershed for institutional tokenization, demonstrating that traditional asset managers can operate tokenized fund products within the existing regulatory framework.

Division of Economic and Risk Analysis (DERA)

Provides economic analysis supporting SEC rulemaking, enforcement, and examination activities. DERA has published staff studies on digital asset market structure, trading patterns, and investor behavior that inform the Commission’s regulatory approach. DERA’s analysis capabilities include blockchain forensics, on-chain transaction analysis, and quantitative modeling of digital asset market dynamics.

SEC Leadership and Digital Asset Policy

Historical Approach (2017-2024)

The SEC’s digital asset policy evolved through three distinct phases:

Phase 1: Observation and Guidance (2017-2019). The DAO Report (2017) established that the Howey test applies to digital assets. The 2019 Framework for Investment Contract Analysis provided detailed guidance. FinHub was established as the primary engagement point. No-action letters were issued for TurnKey Jet and Pocketful of Quarters tokens.

Phase 2: Enforcement Acceleration (2020-2023). Under Chairman Gensler, the SEC dramatically increased enforcement activity, pursuing cases against Ripple, LBRY, BlockFi, and dozens of other entities. The enforcement-first approach drew criticism for regulating through litigation rather than rulemaking. Gensler’s assertion that “the vast majority” of crypto tokens are securities represented the broadest jurisdictional claim of any SEC chair.

Phase 3: Task Force Engagement (2024-present). The Crypto Task Force signaled a shift toward engagement, holding public roundtables on token classification, market structure, and custody. Commissioner Peirce’s Token Safe Harbor proposal received renewed consideration. Several enforcement actions were dismissed or settled on favorable terms.

Current Priorities (2025-2026)

The SEC’s current digital asset priorities include:

1. Market structure modernization — Evaluating whether Regulation ATS adequately accommodates blockchain-based securities, including 24/7 trading, atomic settlement, and programmable compliance.
2. Custody framework formalization — Converting the SPBD no-action framework into formal rulemaking and addressing SAB 121 implications for bank custody of digital assets.
3. Token classification guidance — Providing clearer guidance on when tokens transition from securities to non-securities (the “sufficient decentralization” concept from the Hinman speech).
4. Legislative engagement — Coordinating with Congress on the FIT21 Act and other proposed legislation that would define the SEC-CFTC jurisdictional boundary.
5. Accredited investor definition reform — Considering expansion of the accredited investor definition to include financial sophistication measures beyond wealth thresholds.

Engagement Pathways for Market Participants

Market participants can engage with the SEC through several channels:

FinHub — The Strategic Hub for Innovation and Financial Technology serves as the primary entry point for digital asset regulatory inquiries. FinHub staff provide informal guidance on token classification, offering structure, and regulatory applicability. Engagement is free and confidential, though FinHub guidance is not binding.

Crypto Task Force — The Task Force conducts public roundtables and accepts written submissions on digital asset policy topics. Roundtable transcripts and submissions are publicly available.

No-action letter requests — Formal requests for staff positions on specific structures. The SEC has issued a limited number of no-action letters for digital assets, and the process is resource-intensive (typically 6-18 months).

Reg A+ qualification — Direct engagement with the Division of Corporation Finance through the offering statement review process. This is the most substantive engagement pathway, as staff provides detailed comments on token-specific disclosures.

Form D filing — Notice filing for Reg D offerings through EDGAR. No staff review, but filings create a public record that the offering was conducted under a claimed exemption.

Examination process — SEC’s Office of Compliance Inspections and Examinations (OCIE) conducts examinations of registered entities, providing an opportunity for constructive engagement on compliance practices.

Key SEC Releases for Tokenized Securities

For FINRA’s role as the SRO implementing SEC policy at the broker-dealer level, see our FINRA profile. For the enforcement statistics dashboard tracking SEC digital asset enforcement activity, see our dashboards. For the SEC-CFTC jurisdictional comparison, see our analysis.

SEC Budget and Digital Asset Resources

The SEC’s total budget for FY2024 was approximately $2.1 billion, supporting approximately 5,000 staff members. The Crypto Assets and Cyber Unit within the Division of Enforcement comprises over 50 dedicated staff members focused on digital asset enforcement. Additional SEC personnel work on digital asset matters across the Division of Corporation Finance (reviewing Form 1-A and registration statements for tokenized securities), the Division of Trading and Markets (overseeing ATS and broker-dealer registration), and the Office of the Chief Accountant (developing accounting guidance like SAB 121).

The Crypto Task Force represents a new organizational structure that coordinates digital asset policy across all SEC divisions, ensuring that guidance from FinHub, enforcement decisions, and rulemaking proposals are consistent and coherent. This centralized coordination marks a departure from the prior approach where each division independently addressed digital asset questions within its own mandate.

Historical Milestones in Digital Asset Regulation

The SEC’s engagement with digital assets follows a timeline that security token issuers should understand:

• 2013: SEC warns investors about Bitcoin Ponzi schemes (first formal acknowledgment of digital assets).
• 2017: DAO Report applies securities law to digital tokens for the first time.
• 2018: Creation of the Crypto Assets and Cyber Unit; ICO enforcement wave begins.
• 2019: Publication of the Framework for Investment Contract Analysis.
• 2020-2024: Peak enforcement activity, including Ripple, Terraform, and BlockFi actions.
• 2025: Creation of the Crypto Task Force; enforcement-to-guidance transition begins.

For the SEC’s official digital asset resources, see SEC Digital Assets and the SEC’s EDGAR filing system.