How SEC Shapes the Future of Cryptocurrency: The Role of the American Regulator in the Global Financial System

Every day, traders and investors around the world listen closely to news from Washington. Any statement from the American financial regulator instantly causes price fluctuations, sparks concern, and shapes market participants’ strategies. The regulator under the abbreviation SEC is not just a government agency; it is one of the most powerful levers of influence on global financial markets, including the rapidly developing cryptocurrency sector.

The American financial oversight system was formed several decades ago, but today it is becoming the arbiter of crypto asset litigation. Understanding how the SEC operates and its strategies regarding digital assets is essential for every market participant wishing to forecast trends and make informed decisions.

Why SEC decisions shake the entire crypto market

The United States remains the financial capital of the world, and its regulatory framework influences the global economy much more strongly than the decisions of other national regulators. When the American Securities and Exchange Commission (created in 1934 in response to the 1929 financial crisis) moves, the entire cryptocurrency sector halts in anticipation of the consequences.

The current chair, Gary Gensler, leads the agency with a firm stance on decentralized finance. His view of cryptocurrencies as a high-risk sector requiring maximum regulation defines the industry’s development trajectory. Gensler recognizes Bitcoin as a commodity but considers most other tokens as unregistered securities requiring strict oversight.

Lawsuits against major platforms, accusations of illegal trading of digital assets, demands for full transparency of operations — all are tools the SEC uses to establish a new order in the market. Every court decision instantly reflects in the price of Bitcoin, alternative coins, and the entire crypto investor portfolio.

The internal architecture of American financial oversight

The Securities and Exchange Commission is a multi-level structure built on the principle of specialized departments. Each division is responsible for a specific segment of the financial market and the crypto ecosystem.

Main components of the SEC include:

• Investment Management Division — oversees investment companies, funds, investment advisors, and their activities in the market
• Corporate Finance Department — supervises registration and disclosure by securities issuers
• Trading and Markets Division — monitors the fairness of trading operations and prevents market manipulation
• Enforcement Division — investigates violations of legislation and prepares lawsuits
• Risk and Innovation Analysis Department — studies emerging technologies and their impact on the financial system

This structure allows the SEC to simultaneously develop an understanding of crypto technologies and tighten requirements for their use.

From Bitcoin to DeFi: how the evolution of SEC’s stance is changing the market

At the end of 2020, the SEC filed a lawsuit against Ripple, claiming that the company raised over $1.2 billion through the sale of unregistered securities in the form of XRP tokens. These events triggered a wave of uncertainty that still influences the altcoin market.

Subsequently, lawsuits followed against major crypto exchanges, in which the SEC accused platforms of facilitating illegal trading of unregistered assets. According to the regulator’s position, many coins traded on these exchanges are technically securities and must comply with registration requirements.

In early 2023, the regulator targeted the stablecoin market by filing a lawsuit against the issuer of BUSD. The agency claimed that the popular dollar-pegged stablecoin is an unregistered security. The BUSD price immediately plummeted, taking several days to recover, demonstrating the power of the SEC’s influence on real market movements.

Today, the SEC is closely watching USDT, USDC, and the entire decentralized finance segment. The SEC demands full compliance with established standards and direct registration as securities exchanges from all operators and platforms.

Stablecoins and DeFi under scrutiny: the future of decentralized finance

A new wave of regulation initiated by the SEC is especially focused on stablecoins and decentralized finance. Gensler and his team see stablecoins as a potential systemic risk to financial stability, and DeFi as a platform for money laundering and funding prohibited activities.

The registration requirement that the SEC imposes on operators means that any platform allowing trading of crypto assets within the US must obtain a license and disclose full information about its operations.

This stance simultaneously threatens the development of innovative financial products and promises to bring more investment confidence to the market. The paradox is that the SEC both protects and restricts the market.

The global impact of sparse regulation

Although the SEC’s authority is nominally limited to U.S. territory, its influence extends far beyond American borders. Most major crypto projects are forced to adapt to the requirements of the U.S. regulator, as the US market remains critical to their development.

Crypto companies face a choice: either completely withdraw from the US market or transform their business models to comply with SEC requirements. Most choose the second path, which involves centralization, registration, and full monitoring of all operations.

Outlook: a new order on the horizon

The evolving approach of the SEC to cryptocurrencies signals a shift from the era of crypto anarchy to an era of sanctioned innovation. The regulator demonstrates that it is willing to cooperate with projects that meet its standards but is ruthless toward those that ignore them.

The future of cryptocurrencies largely depends on how the SEC’s position develops. If the regulator continues its strict course, we can expect market consolidation around regulated platforms. If pressure eases, the innovative sector will receive a new development boost.

For every market participant, understanding the SEC’s logic and goals becomes an essential skill for survival and prosperity in the digital financial ecosystem.