The U.S. Securities and Exchange Commission (SEC) is undertaking a full-scale retreat from much of the major crypto litigation started under former Chair Gary Gensler, but not everyone is off the hook.

At least four lawsuits against crypto companies — Ripple, Kraken, Cumberland DRW and Pulsechain — remain ongoing, and probes into another three firms — Unicoin, Crypto.com and Immutable — have not yet been closed.

SEC Commissioner Hester Peirce, the leader of the agency’s newly-created Crypto Task Force, has already made good on her promise earlier this month to “disentangle” the SEC from various crypto-related litigation. The agency has agreed to drop its cases against Coinbase and ConsenSys, pending commissioner approval, and has put its cases against Binance and Tron on pause as the parties consider a “potential resolution.”

The unprecedented activity level at the SEC as it backs away from crypto actions illustrates «just how beyond the pale the last four years were,» Coinbase Chief Legal Officer Paul Grewal in an interview with CoinDesk. «It is definitely something we’ve never seen before, but I think it’s well warranted.»

Over the past two weeks, a number of companies who previously received Wells notices — essentially a heads-up from the regulator that it intends to file enforcement charges — got word from the SEC that the investigations into them had been closed, and enforcement charges would not be filed against them. That list includes Robinhood Crypto, decentralized protocol Uniswap, non-fungible token (NFT) marketplace OpenSea and crypto exchange Gemini.

The Open Suits

Though the SEC has retreated from its accusations that Coinbase operated as an unregistered securities broker and exchange, similar charges against Kraken have not yet been dropped. The SEC sued Kraken in November 2023, accusing the firm of commingling customer and corporate funds while operating as an unregistered securities broker, clearing agency and dealer. A representative for Kraken did not respond to CoinDesk’s request for comment.

Similarly, the SEC sued Cumberland DRW — the crypto trading arm of Chicago-based trading firm DRW — last year for allegedly operating as an unregistered securities dealer. Don Wilson, the founder of DRW, pledged to fight the suit at the time. A representative for DRW declined to comment, telling CoinDesk the firm currently has no updates to share.

Read more: Who’s Afraid of Gary Gensler? Not Don Wilson, the Trader Who Beat the Regulator Once Before

The SEC sued Ripple in 2020 and largely lost in 2023, when a New York judge ruled that XRP, when sold to retail investors, wasn’t a security. The SEC subsequently appealed that ruling. Though both Ripple executives and outside experts have speculated that the agency will drop the appeal, the agency has not yet made any public statement about the case. A representative for Ripple told CoinDesk the company currently has no updates to share.

Rebecca Fike, a Dallas-based partner at law firm Vinson & Elkins and a former SEC enforcement attorney, told CoinDesk she expects the SEC to drop any of its pending cases that are based on using the Howey test to charge a firm with offering unregistered securities, especially where there are no findings of fraud or other investor-protection related issues.

“As for why some have been dropped before others, it could be internal or court based timelines that are setting priorities,” Fike said. “There is also a chance that some crypto-related cases that seem to fit the Howey framework AND that the SEC determines are based squarely in fraud — ie, a promoter or CEO saying one thing but doing another with investor funds — could continue under a traditional fraud framework.”

The SEC brought fraud and registration allegations against Richard Schueler, better known as Richard Heart, Pulsechain, PulseX and Hex in July 2023. There was a hearing on the defendants’ motion to dismiss last October, and the judge overseeing the case dismissed it last Friday, though she gave the SEC 20 days to amend it.

The Open Probes

Several of the SEC’s probes — investigations that have not yet led to filed charges — into crypto companies also remain open.

Crypto.com sued the SEC last October after it received a Wells notice. The firm voluntarily dropped its suit two months later, shortly after CEO Kris Marzalek met with then-President Elect Donald Trump. Crypto.com did not respond to CoinDesk’s request for comment.

Australian blockchain gaming and NFT company Immutable also received a Wells notice last year connected to the sale of its IMX token in 2021, and pledged to fight any ensuing enforcement charges. Neither the company nor the SEC has made any public statements about the status of the probe.

Unicoin also received a Wells notice last year informing the firm that the SEC planned to bring charges alleging violations related to fraud, deceptive practices and the offer and sale of unregistered securities. Unicoin did not respond to CoinDesk’s request for comment.

Looking forward

The SEC’s retreat, as well as the slashing of its crypto enforcement team, according to Fike, is an indication that the agency is moving away from the so-called “regulation by enforcement” approach to the crypto industry undertaken by former Chair Gensler.

“I think the SEC is signaling through staffing that it means what it is now saying: that crypto regulation will come through statements and potential future rulemaking, not case-by-case enforcement actions,” Fike said. “Their hope, and mine, is that a backing away from calling all crypto securities and assessing the crypto industry as a whole under Commissioner Peirce’s new taskforce, will create some clarity around crypto regulation.”

While the SEC is changing rapidly, not everyone is happy. Gemini president and co-founder Cameron Winkelvoss took to X earlier this week to demand retribution for the time and money the crypto exchange spent defending itself against the SEC’s probe. He suggested that the SEC repay Gemini triple its legal costs and publicly fire all staff involved in the probe.

According to Fike, this is probably a non-starter.

“I can’t imagine the SEC would ever do that. It seems like it would be a difficult precedent to set for it and other agencies who try to regulate in new and emerging markets,” Fike said. “It’s important to note that new financial products can often be a source of fraud, and people/investors can be harmed by them. I do think the SEC was trying to be present and active in a billion-dollar market full of investors who may be fearful of ‘missing out’ but don’t necessarily have the financial or technological savvy to parse through the real crypto opportunities from the potential frauds.»

Fike went on, adding: “Many may disagree with the path they took, and Commissioners Peirce and Uyeda clearly do, but they are also benefitting from some maturation in the crypto universe. I think it is good that the SEC is taking a step back and looking to create a better regulatory structure for crypto and digital assets, but I don’t think that means their earlier efforts were ill-intentioned or deserving of punishment.”