Let me talk to you about the least sexy, most important force acting on your investments: regulation. I know, I know — stay with me — because in early 2025 the weather over the entire crypto world changed almost overnight, and understanding why is far more useful to you than any price chart.
Think of financial regulators as the climate your money lives in. You barely notice them when things are calm. But when the climate shifts, everything that grows in it shifts too. And in January 2025, it shifted about as dramatically as these things ever do.
The regulator who changed the weather
For four years, crypto in America had lived under a famously tough regime. The Securities and Exchange Commission, under its then-chair, ran what the industry grumblingly called “regulation by enforcement” — bringing something like a hundred actions against crypto firms, treating most tokens as unregistered securities, and leaving companies squinting at a rulebook that never quite came into focus. Supporters of that approach saw a necessary crackdown on a field genuinely riddled with scams, protecting ordinary investors from harm. Critics saw damaging vagueness that punished good actors and shoved innovation offshore. Both, honestly, had a point.
Then the leadership changed, and so did the entire posture. A new, openly pro-innovation SEC chair took the helm, and the pendulum didn’t so much swing as bolt for the other side of the room.
What actually changed
The practical moves came thick and fast, and two are worth knowing about.
First, a clunkily named accounting rule – SAB 121 was scrapped. Its effect had been to make it wildly impractical for banks to hold crypto for their customers — they’d essentially had to log your coins as their own liability, which no sane bank wanted to do. Gone. Suddenly, the door for banks to offer crypto custody swung open. Second, more than ten active investigations and several marquee lawsuits against big crypto names were quietly dropped, most without a penny in penalties. By year’s end, the SEC had launched roughly 60% fewer crypto enforcement actions than the year before. The agency also signalled that most memecoins and dollar-backed stablecoins wouldn’t be treated as securities at all — a shift I unpick further in the stablecoin story.
For the industry, it felt like walking out of a long, hard winter into unexpected spring. Firms started applying for licences, expanding, and — after years of being frozen out — finally getting their phone calls returned by the banks.
What it actually means for you
Here’s where I stop narrating and start being useful, because a regulatory thaw is a genuine double-edged thing, and I’d be a poor guide if I only showed you the shiny side.
The upside is real: clearer rules, more products, easier access, and a sector no longer operating under a permanent legal cloud. Lovely. But cast your mind back to what those hundred enforcement actions were for — a great many of them existed to protect people exactly like you and me from the sector’s genuine bad actors. When the enforcement eases, that protective netting loosens with it. Which means the responsibility for spotting the dud, the scam, the too-good-to-be-true shifts further onto you. A friendlier regulator is not the same thing as a safer market. It just means fewer grown-ups are checking the room.
And one last thing I’d tuck away, because almost nobody says it out loud: this new, sunnier climate rests largely on who currently holds the job, not on settled, durable law. Appointments change. Moods change. What was rewritten quickly can be rewritten again. So enjoy the warmer weather by all means — I would just be cautious about building a house that only survives in summer.
Regulation is dull right up until the moment it quietly decides what your money is allowed to do. Which is precisely why the smart move is to always, always know which way the wind is blowing.
The Jacqueline Brand — knowledge builds confidence, confidence builds wealth. This is editorial commentary for inspiration, not financial or professional advice. Always do your own research. The Collection
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