The withdrawal of the Securities and Exchange Commission’s (SEC) lawsuits against Coinbase and Robinhood sets the stage for a significant shift in the regulatory landscape, at least in the U.S., according to analysts.
From regulatory changes to a new policy approach to cryptocurrency, Business Insider analysts highlight three key factors that investors should keep in mind in the near future:
The SEC’s Actions
Regulators are likely to drop other lawsuits and investigations initiated under the previous administration. Zach Shapiro, head of policy at the Bitcoin Policy Institute, pointed to the ongoing SEC cases against Binance and Kraken—two crypto exchanges targeted by regulators for reasons similar to those cited in the lawsuit against Coinbase.
The case to watch in this space is the SEC’s lawsuit against Ripple Labs, the issuer of the altcoin XRP. In its lawsuit, the SEC alleged that Ripple’s sale of XRP tokens constituted an unregistered securities offering. Importantly, this case has been seen as the legal precedent that could classify most crypto assets as securities under SEC jurisdiction.
More broadly, enforcement of securities laws could also be “significantly curtailed,” in part due to the influence of the Government Efficiency Department, as Elon Musk’s DOGE project could push for greater scrutiny of the SEC’s internal workings and efforts to streamline the agency.
Regulatory Framework
Shapiro stated that he believes lawmakers are just a few years away from passing a bill that would restructure the market and essentially grant cryptocurrencies regulatory clarity.
Congress is also expected to pass a bill on stablecoins within the coming months. Shapiro referenced David Sacks, the White House’s “crypto czar,” who recently stated that the Trump administration is prioritizing legislation to regulate stablecoins—cryptocurrencies pegged to real-world currencies. The White House views such a move as critical to maintaining the dominance of the U.S. dollar.
Volatility
With such major changes on the horizon, the likelihood of increased volatility in the crypto market also rises. If Congress moves forward with crypto-focused legislation, it could trigger a negative shock to cryptocurrency prices, said Amy Lynch, an executive at FrontLine Compliance, citing past instances where crypto prices plummeted in response to regulatory changes.
Shapiro, however, sees potential for a more positive trajectory once new legislation is passed, predicting renewed institutional interest in crypto once a stablecoin bill is established.
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