U.S. Securities and Exchange Commission

Overview

The U.S. Securities and Exchange Commission is an independent federal regulatory agency responsible for administering federal securities laws (Congressional Research Service). Congress created it by passing the Securities Exchange Act of 1934 in the wake of the 1929 stock market crash, to help restore confidence in capital markets (Congressional Research Service). Its three-part mission is capital formation, investor protection, and maintaining fair, orderly, and efficient markets (Congressional Research Service).

The agency is led by five presidentially appointed commissioners, including a chair, all subject to Senate confirmation; they serve staggered five-year terms, and no more than three may belong to the same political party (Congressional Research Service). In fiscal year 2024 it had around 5,300 positions and 5,000 full-time-equivalent employees across six divisions — Corporation Finance, Enforcement, Examinations, Investment Management, Trading and Markets, and Economic and Risk Analysis — plus ten regional field offices (Congressional Research Service). Its enacted FY2024 budget was about $2.1 billion, set through congressional appropriations and offset by transaction fees the SEC collects from securities exchanges (Congressional Research Service).

The SEC enforces a long list of statutes: the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act and Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002, and the Dodd-Frank Act of 2010 (Congressional Research Service).

What it is known for

The SEC is best known as the federal cop on the beat for U.S. securities markets — and its recent record reads as two sharply different eras. Under Chair Gary Gensler, fiscal year 2024 produced the highest annual financial remedies in agency history ($8.2 billion) while pursuing an aggressive crypto-enforcement campaign (SEC). In 2025, under new leadership, the agency withdrew multiple crypto enforcement actions, dropped its Ripple appeal, and voluntarily dismissed its Binance lawsuit — while insisting it had merely “put a stop to regulation by enforcement” and refocused on fraud (SEC). The Justin Sun case — filed, frozen, then dropped — is the clearest single illustration of that pivot (CoinDesk; Gizmodo).

Enforcement record

The SEC’s own year-end releases make the contrast between the two eras precise. In fiscal year 2024, the agency filed 583 total enforcement actions — 431 “stand-alone” actions, 93 “follow-on” administrative proceedings, and 59 actions against issuers delinquent in required filings — a 26 percent decline from FY2023, but obtained orders for $8.2 billion in financial remedies, the highest amount in SEC history (SEC). That total consisted of $6.1 billion in disgorgement and prejudgment interest (also a record) and $2.1 billion in civil penalties (the second-highest ever) (SEC). Roughly 56 percent of the $8.2 billion was attributable to a single monetary judgment: the one obtained after the SEC’s jury-trial win against Terraform Labs and Do Kwon (SEC).

The Terraform case was the flagship. After a jury found Terraform Labs and founder Do Kwon liable for fraud, the defendants agreed to a final judgment ordering them to pay more than $4.5 billion in disgorgement, prejudgment interest, and civil penalties — the highest remedies the SEC has ever obtained following a trial (SEC). Kwon personally agreed to financial remedies of more than $200 million and an officer-and-director bar (SEC).

FY2024’s other headline actions spanned the agency’s traditional territory: Morgan Stanley paid about $166 million in disgorgement and prejudgment interest plus an $83 million civil penalty to settle fraud charges over the disclosure of confidential information about “block trades”; FirstEnergy paid a $100 million civil penalty over a political-corruption scheme; and SAP paid more than $98 million to resolve Foreign Corrupt Practices Act violations (SEC). A recordkeeping sweep over off-channel communications produced more than $600 million in civil penalties against more than 70 firms in FY2024 alone, and more than $2 billion since December 2021 (SEC). The agency also barred 124 individuals from serving as officers and directors of public companies, the second-highest number in a decade; returned $345 million to harmed investors; and received a record 45,130 tips, complaints, and referrals (SEC).

Fiscal year 2025, the first under the new Commission, looked very different. The SEC filed 456 total actions (303 standalone, 69 follow-on, 84 delinquent-filer) and obtained orders for monetary relief totaling $17.9 billion — but the agency itself supplied the fine print: that figure included “deemed satisfied” amounts from parallel criminal proceedings and the long-running Robert Allen Stanford $8 billion Ponzi-scheme judgment, and excluding those, the year’s new-action relief was $1.4 billion in disgorgement and $1.3 billion in civil penalties, for $2.7 billion (SEC). “Over the past year, the Commission has put a stop to regulation by enforcement and recentered its enforcement program on the Commission’s core mission by prioritizing cases that provide meaningful investor protection and strengthen market integrity,” said Chair Paul S. Atkins, adding that resources were redirected toward “fraud, market manipulation, and abuses of trust” (SEC).

The FY2025 release went further than rhetoric: it characterized the prior Commission’s off-channel-communications, crypto-registration, and “definition of a dealer” cases as having “identified no direct investor harm” and as a misallocation of resources (SEC). At the same time, it emphasized individual accountability — about two-thirds of standalone actions charged individuals, a 27 percent year-over-year increase, and 119 individuals were barred from officer-and-director roles (SEC). The agency returned about $262 million to harmed investors, awarded about $60 million to 48 whistleblowers, and received a record 53,753 tips, complaints, and referrals — up nearly 19 percent from the prior year (SEC). It also disclosed that 1,095 investigated matters were closed or otherwise not pursued (SEC).

Crypto and digital assets stance

The SEC’s crypto posture has moved through three distinct phases, and they should not be confused with one another: lawsuits filed and later withdrawn, one reluctant final rule, and a 2025 policy reversal.

The Gensler-era approach was enforcement-first. The SEC sued Ripple Labs over XRP in December 2020, in the final weeks of the first Trump administration (Reuters). It later sued crypto entrepreneur Justin Sun and his companies, and filed civil suits against major crypto exchanges including Coinbase and Kraken (CoinDesk; Reuters). Its case against Binance and founder Changpeng Zhao accused the defendants of artificially inflating trading volumes, diverting customer funds, failing to restrict U.S. customers from the platform, misleading investors about market-surveillance controls, and unlawfully facilitating trading of tokens that prior SEC leadership deemed unregistered securities (Reuters).

The courts did not always agree with the agency. In July 2023, U.S. District Judge Analisa Torres ruled in the Ripple case that the XRP token sold on public exchanges did not meet the legal definition of a security — while giving the SEC a partial victory by holding that $728 million of XRP sales to institutional investors should have complied with securities laws, and fining Ripple $125 million (Reuters). A separate court defeat came in August 2023, when the D.C. Circuit ruled for Grayscale Investments, holding that the SEC had “failed to adequately explain its reasoning” in denying Grayscale’s bid to convert its Bitcoin Trust into a spot bitcoin ETF (Simpson Thacher).

The Grayscale loss forced the one final crypto rule-type action of the Gensler era: on January 10, 2024, the SEC approved eleven spot bitcoin ETF applications in a 3–2 vote, authorizing the first U.S. ETFs to hold bitcoin (Simpson Thacher). Gensler called approval “the most sustainable path forward” but stressed it applied only to ETFs holding “one non-security commodity — bitcoin” and should not be read as the SEC’s view on any other digital asset; Commissioner Peirce concurred, saying the agency had “squandered a decade of opportunities,” while Commissioner Crenshaw dissented (Simpson Thacher).

Then came the 2025 reversal. The SEC formed a Crypto Task Force and withdrew multiple crypto enforcement actions, also ending its defense of the climate disclosure rule, while staff fell by 15 percent between October 2024 and May 2025 (Congressional Research Service). It ended its civil suits against Coinbase and Kraken, and in March 2025 Ripple CEO Brad Garlinghouse announced the SEC would end its appeal in the Ripple case; the SEC declined to comment (Reuters). In May 2025, the SEC voluntarily dismissed its lawsuit against Binance and Zhao by joint stipulation filed in the D.C. federal court (Reuters).

The reversal was not a blanket amnesty. In FY2025 the Division still charged crypto frauds — Unicoin Inc. and four executives over alleged false statements in a Unicoin token offering, PGI Global founder Ramil Palafox over an alleged $198 million crypto-and-forex fraud, and the founder and former CEO of the AI company Nate Inc. over alleged false AI claims in a $42 million raise (SEC). The Commission launched a Cyber and Emerging Technologies Unit in February 2025 covering blockchain, AI, account takeovers, and cybersecurity, and formed a Cross-Border Task Force in September 2025 to pursue fraudsters operating from abroad (SEC).

Chair history and governance

The SEC’s chair lineage, taken from the agency’s own historical summary, shows how the office changes with administrations (SEC). The first chair was Joseph P. Kennedy Sr., who served from July 2, 1934 to September 23, 1935; early chairs included James M. Landis, William O. Douglas (1937–1939), and Jerome Frank (SEC). Arthur Levitt, chair from July 27, 1993 to February 9, 2001 — about seven and a half years — holds the longest chair tenure in the agency’s table (SEC). The 2000s brought Harvey L. Pitt (2001–2003), William H. Donaldson (2003–2005), and Christopher Cox (2005–2009); the Obama years brought Mary L. Schapiro (2009–2012), Elisse B. Walter (designated chair in December 2012), and Mary Jo White (2013–2017); Jay Clayton chaired from May 2017 to December 2020 (SEC).

Gary Gensler served as chair from April 19, 2021 to January 20, 2025, presiding over the record-remedy FY2024 and the aggressive crypto-enforcement campaign (SEC; SEC). After a brief interim in which Commissioner Mark T. Uyeda served as acting chair — a role the FY2025 enforcement release confirms — Paul S. Atkins was sworn in as chairman on April 21, 2025 (SEC; SEC). Atkins is a rare returning chair: he had previously served as an SEC commissioner from 2002 to 2008 (SEC).

The Justin Sun case: filed, frozen, dropped

On March 22, 2023, the SEC sued crypto entrepreneur Justin Sun and three of his companies — the Tron Foundation, the BitTorrent Foundation, and BitTorrent (now known as Rainberry) — over the sale of TRX and BTT tokens, which the regulator described as unregistered crypto asset securities (CoinDesk).

The allegations had three strands. First, the unregistered offer and sale of the two tokens. Second, fraud: the SEC alleged the defendants “fraudulently manipulat[ed]” TRX’s secondary market through an “extensive wash trading” scheme, having employees “engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled” (CoinDesk). Sun allegedly generated $31 million in proceeds from unregistered TRX sales into the manipulated market (CoinDesk). Third, the SEC charged eight celebrities — Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty, Ne-Yo, Akon, Michele Mason, and Austin Mahone — with illegally touting TRX and BTT without disclosing they were paid to do so; most of them settled (CoinDesk). Then-Chair Gary Gensler said the case showed “the high risk investors face when crypto asset securities are offered and sold without proper disclosure” (CoinDesk).

The case did not proceed to trial. It was put on hold when Trump reclaimed the presidency — “as several other cases were simply dismissed around the same time” (Gizmodo). Then, on March 5, 2026, the SEC moved to dismiss all of its claims against Sun personally, the Tron Foundation, and the BitTorrent Foundation (Gizmodo). “I am very pleased to confirm that the SEC has moved to dismiss all claims against me, Tron Foundation, and BitTorrent Foundation,” Sun posted that day (Gizmodo).

The dismissal came with a price tag attached to a different defendant: Rainberry agreed to pay a $10 million civil penalty, while Sun and his companies made no admission of wrongdoing or innocence — and the settlement still required court approval (Gizmodo).

Why the dismissal drew fire

The political context is what made the settlement newsworthy beyond crypto circles. Sun is reportedly a large holder of at least two Trump-affiliated crypto assets: World Liberty Financial’s WLFI token and the TRUMP memecoin (Gizmodo). He had previously been at the center of pay-to-play allegations from three Democrats on the House Financial Services Committee against Trump’s SEC, directly mentioning his WLFI and TRUMP holdings (Gizmodo).

Sen. Elizabeth Warren released a statement calling the outcome corrupt: “Last month, SEC Chair Atkins denied in front of Congress that the Trump Administration is giving a free pass to crypto billionaires with ties to Donald Trump. Justin Sun poured $90 million into Trump’s crypto ventures, and today the SEC agreed to drop its case against him. The SEC should not be a lap dog for Trump’s billionaire buddies” (Gizmodo).

A different criticism came from inside the agency’s own alumni network. Former SEC chief of staff Amanda Fischer argued the settlement left the SEC’s crypto doctrine incoherent: “The SEC via this settlement concluded that TRON was a securities offering,” she posted. “How do they distinguish TRON from all the other tokens whose lawsuits they dismissed? What about the platforms that listed TRON? Aren’t they securities exchanges?” (Gizmodo).

Timeline

• 1934 — Congress passes the Securities Exchange Act, creating the SEC after the 1929 crash; Joseph P. Kennedy Sr. becomes the first chair (Congressional Research Service; SEC).
• 1993 — Arthur Levitt begins a chairmanship that runs to 2001, the longest in the agency’s table (SEC).
• 2020 — The SEC sues Ripple Labs over XRP in December (Reuters).
• 2021 — Gary Gensler is sworn in as chair on April 19 (SEC).
• 2023 — The SEC sues Justin Sun and his companies on March 22 (CoinDesk); in July, Judge Torres issues her mixed XRP ruling (Reuters).
• 2024 — On January 10 the SEC approves eleven spot bitcoin ETFs; FY2024 brings 583 enforcement actions and $8.2 billion in remedies, including the more-than-$4.5 billion Terraform judgment (Simpson Thacher; SEC).
• 2025 — The SEC forms a Crypto Task Force, ends suits against Coinbase and Kraken, drops its Ripple appeal in March, and voluntarily dismisses its Binance lawsuit in May; Paul S. Atkins is sworn in as chair on April 21; FY2025 ends with 456 actions and $17.9 billion in ordered relief (Congressional Research Service; Reuters; Reuters; SEC).
• 2026 — On March 5 the SEC moves to dismiss its claims against Sun, the Tron Foundation, and the BitTorrent Foundation, with Rainberry agreeing to a $10 million penalty (Gizmodo).

Related entities

• Justin Sun — the crypto entrepreneur the SEC sued in March 2023 over TRX and BTT, and whose case it moved to dismiss in March 2026.
• Tron Foundation — Sun’s company, co-defendant in the 2023 SEC suit and the 2026 dismissal.
• World Liberty Financial — Sun is reportedly a large holder of its WLFI token, the holding cited in the pay-to-play allegations around the Sun dismissal.
• Binance — the world’s largest crypto exchange, which the SEC sued in 2023 and voluntarily dismissed its case against in May 2025.
• FTX — Silvergate Bank’s crypto customer whose activity was at issue when the SEC settled charges against Silvergate over its BSA/AML compliance monitoring.

What this profile does not claim

The profile does not state whether the March 2026 Sun dismissal was with or without prejudice — that detail appeared only in snippet-level sources, so it reports only that the SEC “moved to dismiss.” It does not assert the court venue, which was likewise snippet-only. It does not present any single figure for Sun’s Trump-linked crypto investments as fact; the $90 million number appears solely as Sen. Warren’s attributed claim. It reports pay-to-play allegations as allegations and does not assert that any quid pro quo occurred. The Sun settlement’s court approval was still pending at the time of the Gizmodo report, and the profile does not claim it was granted. The profile does not state whether the Binance suit dismissal was with or without prejudice, and it does not assert the filing dates of the Coinbase or Binance lawsuits. It does not claim the Ripple matter’s final resolution beyond the March 2025 appeal withdrawal. The FY2025 $17.9 billion headline is presented alongside the SEC’s own adjusted $2.7 billion figure for new-action relief, not as a like-for-like comparison with FY2024.