Crypto News: SEC Backs Off Kraken, What to Expect

On Monday, March 3, 2025, the U.S. Securities and Exchange Commission (SEC) is making crypto news headlines. There were two significant moves that could reshape the crypto regulatory landscape.

First, it has agreed to drop its enforcement lawsuit against Kraken, announced on Monday by the exchange.

Second, as reported by Bloomberg, the oversight agency is allegedly offering eligible employees a $50,000 incentive to resign or retire by April 4, 2025. This is as part of the Trump administration’s push to downsize the federal government.

SEC Drops Case Against Kraken

In November 2023, the SEC filed a suit against Kraken. They accused the exchange of commingling customer and corporate funds and operating without proper registration as a securities broker, clearing agency, and dealer.

Kraken chose to fight the charges. A federal judge determined that the SEC had a plausible case, setting the stage for a trial.

However, in a surprising turn, the SEC has now reportedly agreed to dismiss the case with no admission of wrongdoing from Kraken. As well as, no penalties paid, pending approval from the SEC’s commissioners.

According to the Monday announcement from Kraken,

“The SEC’s decision to dismiss its lawsuits against us (and many others) is more than just a legal victory—it’s a turning point for the future of crypto in the U.S. It ends a wasteful, politically motivated campaign, lifts uncertainty that stifled innovation and investment, and clears the path toward a stable, forward-thinking regulatory regime.”

The dismissal of the Kraken case is part of a larger pattern where the SEC, under new leadership, is scaling back on its aggressive enforcement actions against the crypto industry.

This shift comes after years of what many in the industry called “regulation by enforcement” under former Chair Gary Gensler.

The new administration has pledged to work towards clearer regulatory guidelines for digital assets, moving away from the confrontational stance of the past.

Recently, crypto news reports by The Coin Republic show the SEC has also paused its ongoing cases against Tron Foundation and its affiliated entities, as well as against cryptocurrency exchange giant Coinbase.

Additionally, it has closed investigations into OpenSea, Gemini, Robinhood Crypto, and Uniswap without filing any charges. This indicated a significant change in its approach to regulating the crypto space, as reported by various industry sources.

Crypto News: SEC Offers Staff $50,000 to Leave

Concurrently, the SEC is reportedly offering its eligible employees a $50,000 incentive to resign or retire by April 4, 2025.

This move is part of the Trump administration’s broader initiative to reduce the size of the federal government. It aimed to fire thousands of workers.

The offer, communicated via an email from SEC Chief Operating Officer Ken Johnson to all staff on Friday, February 28, 2025, and reported by Bloomberg on March 3, is open to staff who were on the agency’s payroll before January 24, 2025.

Those who accept must leave through resignation, transfer to another agency, or immediate retirement, and if they return to the SEC within five years, they must pay back the incentive in full.

The deadline to apply for this voluntary separation incentive or voluntary early retirement program is March 21, 2025, as stated in the guidance reviewed by Bloomberg.