by Aaron Krowne
For years, the SEC’s approach to crypto has been defined less by clear rules and more by retroactive enforcement. Instead of offering upfront affirmative guidance, the agency relied almost entirely on after-the-fact actions and novel legal theories to draw fine regulatory distinctions, leaving developers, exchanges, and investors to navigate uncertainty on their own.
That may finally be changing. SEC has started issuing forward-looking guidance on key crypto issues, which is a shift from enforcement-only regulation to something more organized, predictable, and affirmative.
Meanwhile, the Department of Justice is narrowing its focus, prioritizing cases that involve real financial harm or criminal misuse of crypto assets. Technical or regulatory missteps, by contrast, are less likely to be front and centre unless they’re serious and intentional.
Together, these developments point to something new: a more coordinated and affirmative regulatory approach to the crypto and web3 world. One that still holds bad actors accountable–but that also gives good-faith market participants a clearer sense of the rules, so they can move forward with confidence. It’s not a full reset to a comprehensive and tailor-fit crypto regulatory regime, but signs are that it is the beginning of a more workable environment for the crypto industry in the U.S.
Connecting the Dots: What the SEC Just Told Us
1. Proof-of-Work Mining Isn’t a Securities Transaction
In March 2025, the SEC’s Division of Corporation Finance clarified that proof-of-work (PoW) mining (whether solo or pooled/delegated under contract) doesn’t fall under securities laws. Why? Because it doesn’t entail combining funds to make money primarily off other people’s labour. In short: it fails the Howey Test.
That’s a significant development for miners (particularly those in or running pools, who operate by implicit or explicit legal delegation contract), who’ve long operated in a legal grey area. The SEC’s message here is straightforward: mining, on its own, or under delegation contract, isn’t an investment contract, and it doesn’t trigger registration requirements.
2. Meme Coins Aren’t Automatically Securities, Either
In February, the SEC issued a staff statement on meme coins: tokens that rise to prominence through cultural buzz or social media attention. The takeaway? Most meme coins, especially those with no centralized team or profit mechanism, don’t meet the definition of security. People are presumed to buy them for fun, not expected returns.
But the SEC didn’t give them a free pass. If there’s a centralized team actively promoting the token or managing price expectations, securities laws could still apply. The label doesn’t override the facts (or the “economic reality”, as the SEC and US courts put it).
3. Disclosure Requirements for Blockchain Securities Are Getting Sharper
In April, the SEC updated its disclosure guidance for registered crypto offerings (most-commonly known as “IPOs”). Issuers are now expected to provide more specific details on business models, consensus mechanisms, governance, and more.
Only tokens that meet the Howey or Reves standards will be treated as securities. The focus here is twofold: increase transparency and investor protection without immediately stifling innovation.
This release is perhaps less impactful than many industry observers at first thought: it is specific to registered offerings that bear some relation to a blockchain instrument–and there are very few such offerings relative to crypto tokens released generally. However, it’s a growing number, and as more major enterprises utilize blockchains and make business plans that involve digital assets that exist atop them, this type of SEC guidance helps show the way and gives great peace of mind to venturers in this space.
A Strategic Shift: Starting With the “Safe” Wins
How the SEC chose to roll it out the foregoing guidance just as important as the guidance itself.
Rather than trying to settle crypto’s most complex legal questions at the outset, the SEC has started with issues that are simpler and can more easily be related to existing law. Clarifying, for example, that PoW mining isn’t securities-issuance activity or that most meme coins don’t create investment contracts provides clarity without sparking political blowback or market chaos.
This is likely a deliberate strategy: start small, establish credibility, then scale.
It’s also backed by a structural change. In January, the SEC announced the formation of a new Crypto Task Force led by Commissioner Hester Peirce (a long-time crypto-friendly Commissioner, lovingly nicknamed “crypto mom” by the web3 community). Its goal? To draw clearer lines and develop workable disclosure frameworks. And in February, the SEC followed up with the creation of the Cyber and Emerging Technologies Unit (CETU), to focus on combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space. The CETU replaced the former Crypto Assets and Cyber Unit, which essentially had the mandate of both of the new units. In other words, the SEC split crypto regulation out of the unit handling fraud and crime, and narrowed the mission of each unit accordingly. –
Altogether, we see these changes as more than just a messaging shift–it looks like a real pivot from a reactive enforcement-based strategy to proactive guidance and regulation.
DOJ Crypto Memo: Focused Enforcement Over Blanket Crackdowns
The Department of Justice is making a similar move. In its latest memo, the DOJ signalled a tighter focus: prioritizing cases involving fraud, market manipulation, and money laundering; clear harm caused by bad faith activities, in other words.
In contrast, violations that are technical or procedural in nature are less likely to be prosecuted unless they’re willful and significant (and generally, such violations are “victimless”). This reflects a maturing enforcement strategy, one aimed at rooting out actual misconduct, not just sending signals.
This is a welcome shift. Individuals now have more reason to believe they won’t be prosecuted criminally or otherwise penalized by the Justice Department for honest mistakes or regulatory grey areas. The government is, with this move, apparently sharpening the focus of each agency (and clarifying jurisdictional boundaries) and choosing their targets more carefully.
What This Means for Crypto Regulation Going Forward
Right now, regulators are starting with the low-hanging fruit: PoW mining, meme coins, improved disclosures, a narrowed prosecutorial and enforcement focus on true bad faith conduct that causes harm. These are areas with more legal clarity and a lower risk of controversy.
To be sure, this measured approach is setting the stage for harder questions, especially around token classification and decentralized finance (DeFi). What’s might be coming:
- Clear guidance or interim rules for how different types of tokens like airdrops, utility tokens, and decentralized tokens fit under securities laws.
- Adjustments to regulatory frameworks to better reflect crypto’s unique characteristics.
- More structured engagement with industry, including roundtables, comment periods, and consultation processes.
There’s still a long way to go. But if these early trends hold, we could be moving toward something that’s been missing from U.S. crypto regulation: an openness to good-faith innovation, and predictability.
Conclusion
The SEC’s and DOJ’s recent guidance marks a meaningful pivot from reactive enforcement to proactive guidance and rulemaking. For the first time in a long time, market participants are getting affirmative, forward-looking clarity in areas that matter.
That doesn’t mean the hard questions are solved or that uncertainty or regulatory risks are gone. But it suggests a new posture welcoming innovation and not simply writing-off an entire industry sector, and along with this, favoring transparency, measured engagement, and a path toward regulatory maturity. We believe that, with these changes, SEC has signaled that it has shifted from a de facto adversary of the web3/crypto industry to a proponent. This is being backed up by the above initial moves which demonstrate a desire to help set the regulatory foundation for a trustworthy and innovative crypto industry.
If you’re wondering what this new direction means for your project venture, get in touch with us. We’re here to help you make sense of the rules, map out the legal risks, and plan your next move with confidence.
For deeper dives, check out:
