SEC’s New Audit Rules Are Coming for Crypto—And They’re Not Asking Permission

The regulatory hammer is swinging. The SEC's updated audit inspection standards, long looming over traditional finance, are now poised to reshape the crypto landscape. Forget "guidance"—this is a compliance mandate trickling down to digital asset firms, whether they're ready or not.

What This Means for Your Portfolio

Expect turbulence. Publicly-listed crypto companies and any firm eyeing an IPO now face a higher bar for financial transparency. Auditors will dig deeper into internal controls and risk assessments—scrutiny that could expose operational weaknesses or, conversely, validate rock-solid foundations. It's a forced maturity test for an industry still shaking off its wild-west reputation.

The Compliance Countdown Begins

Implementation won't be optional or slow. Regulators are signaling that crypto's "move fast and break things" era must end where investor protection begins. Firms will need to prove their numbers aren't just creative accounting—a concept as foreign to some crypto natives as a balanced budget is to a congressional committee.

Survival of the Fittest (and Most Transparent)

This regulatory pressure will separate the serious builders from the hype machines. Projects with robust governance and clean books will earn market trust and potentially a premium. Those cutting corners? They'll face existential audits, not just from accountants, but from a skeptical market. In the end, this forced clarity might be the bullish catalyst crypto needs—proving it can play by the big-league rules, not just disrupt them.

The crypto regulatory environment under Trump’s administration

Since President Donald TRUMP took office in January 2025, the Securities and Exchange Commission has dropped or paused approximately 60% of the enforcement cases it had against crypto companies, according to reports from The New York Times.

On January 21, the SEC announced a new Crypto Task Force led by Commissioner Hester Peirce, which was created to develop clear regulatory rules for the industry. Just three days later, Trump issued an executive order that reversed the policies former President Biden put in place.

President Trump’s order was titled “Strengthening American Leadership in Digital Financial Technology.” It established a Presidential Working Group on Digital Asset Markets and showed that blockchain innovation is a national priority.

The SEC has since dismissed lawsuits against major exchanges such as Coinbase and Kraken without penalties.

According to reports, the SEC is no longer actively pursuing any cases against firms with known ties to Trump. The Justice Department has reacted similarly, dismantling its National cryptocurrency Enforcement Team in April and redirecting resources toward other priorities like immigration enforcement and drug trafficking.

In April, Trump appointed Paul Atkins, a former commissioner known for opposing regulatory overreach, as SEC Chair. At the AICPA Conference on Current SEC and PCAOB Developments in December, Atkins criticized recent disclosure rules pushed by his predecessor Gary Gensler, saying they WOULD have undermined traditional financial accounting standards.

The Public Company Accounting Oversight Board (PCAOB), which oversees auditors of public companies, has also reduced its inspections and enforcement actions and refrained from setting new standards ever since the appointment of William Duhnke as PCAOB chairman by President Trump.

Robert Pawlewicz, an accounting professor at the University of Richmond, told CFO Dive that the administration doesn’t need to abolish the PCAOB to make it ineffective. He expects that inspections and enforcement will continue to decrease like they did during Trump’s first term.

In April 2025, the House Financial Services Committee even voted to advance a bill that would abolish the PCAOB entirely, though the bill has not become law.

The PCAOB previously identified crypto assets as a priority for inspections in 2025, especially organizations with material crypto holdings and significant crypto transactions, but with Atkins now overseeing the SEC, which in turn oversees the PCAOB, these inspections seem uncertain.

Atkins previously criticized the PCAOB, saying its rules interfered with audit firms’ judgment. He went on to criticize the board’s budget and salaries.

What does this mean for crypto investors and companies?

For crypto companies, the regulatory environment has become significantly more welcoming. In February, the SEC revamped its Crypto Assets and Cyber Unit into the broader Cyber and Emerging Technologies Unit with about 30 fraud specialists. Acting SEC Chairman Mark Uyeda stated the unit will protect investors and also facilitate innovation.

In July, Trump signed the GENIUS Act into law, establishing the first comprehensive federal framework for stablecoins. Under the Aact, stablecoin issuers must keep enough money in reserve to back every coin they issue, submit monthly audits to prove it, and follow anti-money laundering laws.

The House also passed a separate bill called the Digital Asset Market Clarity Act with support from both political parties.

Advocates and lawmakers like Senator Elizabeth Warren have criticized the sudden regulatory changes. Senator Warren called for an SEC Inspector General investigation in early 2025 to determine whether Trump administration officials improperly influenced SEC decisions on cryptocurrency because Trump, his advisors, and family members all stand to benefit from developments in the crypto industry.

Public Citizen and other advocacy groups believe the SEC changed its approach due to an investment of nearly $250 million from companies like Coinbase, Ripple, and Andreessen Horowitz into various 2024 campaigns.

Despite the controversy, the Trump administration has admitted no wrongdoing. The SEC told The New York Times that political favoritism had nothing to do with its strategies and that the changes were based on legal and policy reasons.

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