The U.S. Securities and Exchange Commission (SEC) is intensifying its scrutiny of crypto assets in 2025, as it ramps up examinations of firms involved in offering, trading, and advising on these assets. The agency’s focus will be on how these assets are treated as securities, ensuring compliance with standards, and assessing the technological risks associated with blockchain.
In its recently published “Examination Priorities” for the Division of Examinations for Fiscal Year 2025, the SEC emphasized its commitment to crypto assets, recognizing the rapid growth and complexity of the sector.
The SEC’s Division of Examinations is closely monitoring firms engaged in the offer and sale of crypto assets, paying particular attention to how these assets are recommended, traded, and handled as securities. The Division noted the increasing number of investments involving crypto assets and their associated products and services. The agency stated:
“Given the volatility and activity in the crypto asset markets, the Division will continue to monitor and, when appropriate, conduct examinations of registrants offering crypto asset-related services.”
Examinations will focus on activities such as the sale, trading, and advising of crypto assets, including popular products like bitcoin and ether exchange-traded offerings. The Division will assess whether firms adhere to their standards of conduct, especially when dealing with retail investors, including those nearing retirement. Firms are also expected to regularly update their compliance frameworks, particularly in areas related to crypto wallet management and custody practices. This includes ensuring operational resilience and maintaining robust business continuity plans.
The SEC’s Division of Examinations is responsible for ensuring that SEC-regulated firms, such as investment advisers, broker-dealers, and investment companies, comply with federal securities laws. Through its risk-based examination program, the Division identifies potential risks to investors and market integrity.
The SEC is also highlighting the technological risks inherent to the crypto space. Recognizing the importance of secure technology, the Division stated:
“The Division will assess registrant practices to address the technological risks associated with the use of blockchain and distributed ledger technology, including risks related to the security of crypto assets.”
This examination of blockchain risks underscores the SEC’s dedication to protecting investors by ensuring the security of platforms and technologies used in crypto transactions. The regulatory focus on crypto assets is part of the SEC’s broader efforts to manage emerging financial technologies and safeguard investors in a volatile market. By prioritizing crypto-related services, the agency aims to enhance market integrity and investor protection.
