Former acting SEC chair Mark Uyeda says the agency dropped a wave of crypto enforcement cases in early 2025 because litigating them would have undermined the commission’s credibility, not because it wanted to reward the industry. Uyeda, who ran the SEC between Gary Gensler’s resignation and Paul Atkins’ confirmation, made the argument on a panel Wednesday at the Psaros Center for Financial Markets and Policy’s Financial Markets Quality Conference.
Under Gensler, the SEC had filed dozens of cases against crypto companies, naming exchanges, lending platforms and token issuers. Within weeks of the change of administration, most of those cases were dismissed or quietly settled. Critics called it payback for the industry’s support of President Donald Trump’s 2024 campaign. Trump had promised to fire Gensler, under whom many of the cases were filed, on day one if elected. Gensler resigned the day Trump took office.
Uyeda rejected the framing. He said the commission was preparing what he called a 180-degree change in rulemaking, and that having its litigators defend positions in court that the agency was simultaneously abandoning would have damaged the SEC’s standing before judges.
“I’m not about to have our litigators, even though they’re having cases that were authorized under the prior administration, stand up in court and have a commission interpretation be issued that is a 180-degree change from what they’d been arguing for that court. I think that hurts [our] credibility as an agency.”
He added there had been significant concerns inside the agency about whether the cases against crypto companies were justifiable under law at all. That admission carries weight coming from a commissioner who voted on those cases, and it is likely to be cited by defense lawyers in any matter that survives from the Gensler era.
The credibility argument, tested
The reasoning has a real legal basis. Courts give weight to an agency’s consistent interpretation of its own statutes, and a regulator that argues one position in a brief while proposing the opposite in rulemaking invites judges to discount both. Dropping weak cases before a policy pivot is a recognized practice, and Uyeda is not the first official to invoke it.
But the argument leaves questions open. Dismissal without prejudice in some matters meant claims could theoretically return, yet in practice most will not. Investors who bought tokens on the theory they were unregistered securities saw those theories abandoned without any alternative framework in place for months. Retail holders who assumed a court would eventually decide whether their tokens were securities got no answer, because no court was ever asked to give one.
The CLARITY Act, which would draw the jurisdictional line between the SEC and the CFTC, failed a key procedural vote in the Senate before clearing committee stages later in the year, leaving the market-structure question formally unsettled even as the enforcement posture reversed. The National Sheriffs’ Association, which had opposed the bill over consumer protection concerns, moved to neutral this week, removing one of the more visible law enforcement objections as senators weigh another attempt at a floor vote.
A shrinking commission
Uyeda has been a commissioner since 2022 and now serves alongside Atkins and commissioner Hester Peirce. That bench is about to get thinner. Peirce’s departure is expected in November, which will leave only two of the five commissioner seats filled, and the White House has not announced nominations for replacements.
A two-member commission can still act on routine matters, but major rulemakings generally need a quorum of three. If vacancies persist, the agency’s ability to finalize the crypto market-structure rules it has been drafting will depend on appointments that have not yet been made. That gap between enforcement retrenchment and rulemaking capacity is where most of the industry’s near-term regulatory risk now sits.
What it means for the market
For crypto firms, the practical picture is mixed. The threat of SEC litigation over token listings has receded, and several exchanges have expanded US listings this year on the assumption the enforcement pause holds. Tokenized stock trading got a temporary SEC exemption in recent days, and the CFTC has moved to assert a larger share of digital asset oversight, including a push to dismiss the CME’s lawsuit over crypto perpetual futures on jurisdictional grounds.
Yet nothing Uyeda described amounts to permission. The dropped cases were dropped, not won, which means no court has settled whether the tokens at issue were securities. The legal cloud lifts only when legislation or rulemaking replaces it, and both paths run through an agency that is about to lose a third of its members.
The political cycle also matters. Enforcement priorities at the SEC have swung with each change of administration for decades, and crypto is only the latest subject of that pendulum. A future commission could revive the same theories Uyeda’s team abandoned, which is why several larger firms continue to seek explicit statutory cover rather than rely on the current posture.
Uyeda’s comments are the most explicit internal account yet of why the dismissal wave happened, and they will feed a debate that is likely to resurface the next time control of the commission changes hands: whether an agency can legally walk away from cases it once called its strongest enforcement priorities, and who answers for the investors left holding assets those cases were meant to test.