Thomas Daniels
After the U.S. Securities and Exchange Commission (SEC) formally concluded its investigation into Robinhood’s cryptocurrency services and financial reporting, the company’s stock increased by about 2.5 percent in premarket trade.
Dan Gallagher, the Chief Legal and Compliance Officer (CLO) at Robinhood, stated in a blog post on February 24 that the SEC has no plans to take enforcement action against the company. The agency’s choice to abandon aggressive crypto litigation marks a larger change in regulatory strategy.
Reversal of Regulation as SEC Refuses to Take Up Crypto Cases
Following a string of comparable SEC withdrawals in 2025, Robinhood’s clearance represents a significant departure from the agency’s prior enforcement-heavy approach. According to reports, the commission has halted legal action against Binance and its founder, Changpeng Zhao, and abandoned cases against Coinbase and OpenSea.
A former SEC commissioner and possible contender for the position of White House crypto czar, Gallagher presented the SEC’s ruling as supporting the crypto industry’s long-standing claim that the majority of digital assets are exempt from federal securities rules. He encouraged the SEC to adopt a clear regulatory framework in place of current enforcement-driven approach.
Gallagher said, “It’s time for the SEC to switch from regulation by enforcement to regulation by regulation,” highlighting the importance of openness and appropriate rules for market players.
The New SEC Leadership Changes Direction After Gensler
The commission filed nearly twice as many enforcement proceedings pertaining to cryptocurrency under former SEC Chair Gary Gensler than it did under his predecessor, Jay Clayton. Significant industry backlash resulted from Gensler’s expansive categorization of cryptocurrencies as securities, with detractors charging the SEC with “ambiguity and capricious” regulation.
The SEC has shifted to a more crypto-friendly regulatory approach since President Donald Trump took office again. Acting Chair Mark Uyeda has delayed several high-profile litigation against digital asset firms, overhauled the agency’s crypto investigations team, reevaluated Ethereum staking requirements, and established a new Crypto Task Force.
For the US cryptocurrency market, this change represents a significant turning point that could lead to institutional adoption and more transparent regulations.
