US SEC's Policy Shift: From Strict Regulation to Collaborative Approach
The Impact of SEC's Policy Change on Asian Markets
This report was written by Tiger Research, analyzing the SEC’s policy shift and its ripple effects across Asian cryptocurrency markets.
TL;DR
Under Acting Chair Mark Uyeda in early 2025, the SEC is shifting from a strict enforcement-focused approach toward industry collaboration.
This change impacts regions beyond the United States. SEC decisions serve as benchmarks for global regulation, prompting Japan, South Korea, Singapore, and Hong Kong to accelerate their regulatory frameworks accordingly.
The SEC will likely establish a clear regulatory framework following Paul Atkins' appointment as Chair. This regulatory clarity will revitalize innovation in the cryptocurrency industry.
1. Introduction
The US Securities and Exchange Commission (SEC) functions as a 'lighthouse' for global cryptocurrency regulation. When the SEC classifies specific tokens as securities or takes legal action against certain companies, it sends a powerful message that extends beyond the US market to global markets.
The SEC's approach shows recent signs of change. Former Chair Gary Gensler predominantly relied on "Regulation by Enforcement" without clear guidelines. In contrast, Acting Chair Mark Uyeda began transitioning the SEC to a more collaborative model after taking office in early 2025. The SEC withdrew key lawsuits and rolled back the SAB 121 regulation. The SEC also established a Crypto Task Force to develop transparent guidelines and clear regulatory frameworks for the industry, accelerating policy changes.
This shift in the SEC's approach has already begun changing the US cryptocurrency industry. This report analyzes how these changes impact Asian markets.
2. SEC’s regulatory journey in Crypto
From 2021 to 2024, the SEC maintained a consistent enforcement-centered regulatory strategy rather than providing clear guidelines. Chair Gary Gensler during this period questioned the sustainability of the cryptocurrency industry and implemented strict measures citing investor protection.
The SEC sued Ripple (XRP) for alleged securities law violations and classified Kraken's staking service as an unregistered security, imposing a $30 million fine and ordering service suspension. The SEC also placed Coinbase, Binance, Consensys, and Uniswap under investigation. This approach conveyed a clear message to US cryptocurrency companies: "Non-compliance with existing securities laws will inevitably lead to enforcement actions." As a result, many companies halted their US expansion or relocated their legal headquarters to regulation-friendly jurisdictions such as Abu Dhabi.
Donald Trump's re-election in late 2024 rapidly shifted the SEC's direction. Trump nominated pro-cryptocurrency Paul Atkins as the next SEC chair. In early 2025, Mark Uyeda became the SEC's acting chairman. Uyeda has served as an SEC commissioner since 2022 and consistently demonstrates a favorable stance toward the cryptocurrency industry. He stands as a prominent pro-cryptocurrency figure.
After Uyeda took office, the SEC began shifting toward a more collaborative approach. In January 2025, the SEC established a Crypto Task Force led by Commissioner Hester Peirce, another strong pro-cryptocurrency advocate.
One of their key actions rolled back SAB 121. This standard required companies to account for custodial cryptocurrency assets as liabilities, creating a significant barrier to institutional market participation. This decision signals the SEC's responsiveness to industry concerns and departure from its previous unilateral regulatory stance.
The SEC has not yet formalized a comprehensive regulatory framework for the industry. However, it continues to clarify policy directions through recent staff statements on stablecoins and meme coins. The SEC differs markedly from its previous approach. It now establishes communication channels with the industry through its Crypto Task Force. It maintains ongoing discussions to build a more flexible and practical regulatory system.
3. How Does the SEC's Regulatory Shift Impact Asian Markets?
3.1 Retail Investors: Shifting Mindshare Toward the US
The SEC's regulatory shift impacts global markets broadly, but limits its direct effect on Asian retail investors. Most Asian investors trade cryptocurrency within their home countries' regulatory frameworks.
For example, US-based cryptocurrency exchanges create difficulties when linking with domestic bank accounts. They also limit direct fiat currency on/off ramps. Transferring cryptocurrencies through domestic exchanges incurs additional fees. Investors face dual volatility risk from both asset price fluctuations and dollar exchange rate movements against local currencies. These constraints demonstrate why US regulatory changes rarely affect Asian retail investors' trading environments directly.
In contrast, the indirect impact remains significant. Following President Trump's re-election, expectations of regulatory easing in the US have created a strong narrative among Asian investors. Many now focus on "investment opportunities in US-based projects." While investors still trade within local regulatory frameworks, market sentiment increasingly centers on US developments. This shift gradually moves Asian retail investors' mindshare toward the US. Industry narratives now form around US markets. Asian retail investors may become more responsive to US market dynamics than their local markets.
3.2 VCs: Making America Greater
Gary Gensler's strict regulatory enforcement as SEC Chair created conservative investment sentiment in the US cryptocurrency venture capital market. According to Galaxy Research, investments in US-headquartered cryptocurrency companies accounted for 46.2% of total investments in Q4 2024. While still significant, this represented a decrease from the previous quarter. During the same period, Hong Kong's investment share increased dramatically from 4% to 17.4%. This clearly demonstrates capital movement toward markets with greater regulatory clarity.
The SEC's recent reorganization around pro-cryptocurrency figures has renewed expectations for the US cryptocurrency market. Signals of clear regulatory framework development further boost these expectations. Trump's "America First" policy combines with this shift. This allows industry-wide US-focused investment strategies to regain momentum. Notably, a16z recently closed its UK office to refocus on the US market. The firm plans to invest over $20 billion in US technology companies in the AI sector alone. This suggests potential expanded investment in US cryptocurrency companies.
However, major Asian countries respond quickly. They will likely strengthen their competitive positions over the medium-to-long term. Hong Kong, Singapore, and Japan have already established institutional foundations. The US policy shift accelerates their regulatory refinement and market expansion efforts. US-centered investment flows may dominate in the short term. Yet ongoing institutional improvements and infrastructure advancement will help Asia maintain its competitiveness.
3.3 Regulators: SEC's Change Serves as a Regulatory Roadmap for Asia
SEC decisions significantly impact regulators across Asia. The SEC's Bitcoin ETF approval in early 2024 demonstrates how US regulatory decisions guide Asian frameworks. Hong Kong exemplified this influence. It allowed spot Bitcoin ETFs just three months after the US approval.
This SEC shift accelerates regulatory development across Asia. Japan already established a stablecoin regulatory framework. License acquisition remained limited until March this year. SBI then obtained the first EPISP license. The Financial Services Agency now pursues legal amendments to classify cryptocurrencies as financial products. South Korea aligns with this trend. The country previously restricted corporate cryptocurrency trading. It will gradually expand access starting with non-profit corporations this year. Southeast Asian countries also reconsider cryptocurrency frameworks. Malaysia and Vietnam lead these efforts.
The SEC’s policy shift is driving a twofold transition across Asia: regulatory clarification and industry acceptance. Regulators are no longer focused solely on tightening regulations. Instead, they are accelerating efforts to design frameworks that foster markets and enhance competitiveness.
4. Closing Thoughts
From 2021 to 2024, the SEC maintained a strict "Regulation by Enforcement" approach. However, in 2025, as crypto-friendly officials took key positions, the SEC shifted toward a more collaborative direction. This change began under Acting Chair Mark Uyeda and will accelerate with Atkins' official appointment as Chair.
Internal views within the SEC are not fully aligned, with some differences in perspective remaining. Commissioner Caroline Crenshaw has publicly criticized the agency’s pro-crypto pivot, raising concerns about specific statements from the Crypto Task Force.
U.S. cryptocurrency policy is no longer shaped solely by the SEC. President Trump, Crypto czar David Sacks, and Chair Paul Atkins are leading broader policy reorganization efforts. Regulation is being repositioned as a foundation for industry growth, rather than a mechanism of suppression. Clear regulatory frameworks are expected to attract capital and support further innovation.
Asian markets respond quickly to this shift. Major countries accelerate their regulatory frameworks. The next phase of industry growth has already begun. Innovation regains momentum with regulatory clarity. Regulation now serves as a starting point for new order rather than a barrier.
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