Club for Growth Commends SEC Chairman for Ending Abusive Enforcement Action

Club for Growth commends SEC Chairman Paul Atkins for beginning the long-overdue cleanup of the Commission’s abusive, anti-innovation war on digital assets.

“Americans deserve a regulator that enforces the law instead of inventing it, punishes real bad actors instead of targeting lawful businesses, and respects due process instead of making companies guess at policy through lawsuits,” said Club for Growth President David McIntosh. “Reining in abusive enforcement is an important first step. Passing durable market-structure legislation is the next one.”

The SEC’s own fiscal year 2025 enforcement report acknowledged a “necessary course correction” in crypto and noted that, beginning in February 2025, the agency dismissed seven crypto-related enforcement actions brought by the Gensler Commission. That is exactly the right direction. The SEC should be targeting fraud, manipulation, and clear investor harm, not weaponizing vague legal theories that were never codified into rules, to wage political and ideological campaigns against an emerging industry.

That course correction was badly needed. Under Gary Gensler, the SEC turned “regulation by enforcement” into a governing philosophy, using lawsuits and threats to substitute for clear rules that Congress never enacted. One of the clearest examples came in the 2024 DEBT Box case, where a federal judge sanctioned the SEC for bad-faith conduct in obtaining and defending an emergency restraining order. The court found that the SEC, under Gensler’s leadership, made false and misleading representations, including mischaracterizing a YouTube video as evidence that assets were being moved overseas to evade U.S. law when, in context, the video did not support that claim. That was not investor protection. It was bureaucratic abuse and a profound institutional embarrassment.

The lesson of the 2024 DEBT Box case is not merely that the SEC’s prior approach went too far. It is that markets cannot be governed by improvisation, contradiction, and enforcement theatrics. Chairman Atkins deserves credit for leading away from that failed model, but ending abusive enforcement is only the beginning. Congress should now finish the job by advancing the Digital Asset Market Clarity (CLARITY) Act to provide the legal certainty that innovators, investors, and consumers have been denied for far too long. The CLARITY Act would help replace arbitrary enforcement and regulatory guesswork with a clear federal framework and actual rules of the road.