In a contentious House hearing on February 11, 2026, SEC Chairman Paul Atkins defended his agency's sharp pivot in crypto enforcement. Under Atkins, the SEC has filed 60% fewer new lawsuits compared to his predecessor. He told lawmakers the agency is done "surprising companies with lawsuits" and wants to build a foundation of clear, predictable rules instead. The shift has drawn industry applause and fierce Democratic criticism.
Political Firestorm: Pause on Justin Sun Case
The hearing quickly zeroed in on the SEC's decision to halt several major investigations, most notably the case against Justin Sun and the Tron Foundation. Critics called the move a sign of regulatory leniency. Atkins declined to discuss individual cases but offered a confidential briefing to Congress. He insisted the new approach targets "real fraud that directly hurts people," not minor paperwork errors.
From Courtroom Battles to Rulemaking
Atkins' SEC is working closely with the CFTC on a joint initiative called Project Crypto, aligned with the Clarity Act — legislation that defines which tokens are securities and which are commodities. Key elements include:
- Moving from regulation-by-enforcement to setting explicit compliance rules upfront;
- Prioritizing cases involving theft, Ponzi schemes, and life savings losses;
- Clearly dividing SEC and CFTC jurisdiction to end years of turf wars over digital asset oversight.
The recent dismissal of cases against major exchanges like Binance has encouraged big banks to re-enter the U.S. crypto market.
Expert View: Can a Lighter Touch Still Protect Investors?
The new model aims to create a "safe harbor" for developers and builders, but it also raises the stakes for the SEC: it must prove it can protect the public without the old enforcement-heavy playbook. Success in 2026 will depend on legislation like the GENIUS Act and the work of Project Digital Assets. If the SEC can transform from a "prosecutor" to a "partner" in innovation, the U.S. may finally resolve the legal uncertainty that has driven many crypto firms offshore.