The SEC's Q3 enforcement developments in the crypto space confirmed that the agency is continuing fraud enforcement while limiting its jurisdiction over more nuanced technical arrangements. On August 5, 2025, the SEC's Division of Corporation Finance (Corp Fin) issued a statement that “liquid staking activities” in connection with "protocol staking" do not involve the offer and sale of securities and are therefore generally outside Corp Fin's purview. Liquid staking allows users who have dedicated their assets to a blockchain network to maintain liquidity by generating derivative assets in the form of tokens based on the original “staked” asset. Users can then exchange or collateralize these tokens without disrupting the underlying assets staked to the blockchain. Applying the Howey “investment contract” test, Corp Fin concluded that liquid staking arrangements should not be considered investment contracts, as liquid staking providers do not offer either entrepreneurial or managerial efforts to depositors of crypto assets and instead are “simply acting as an agent…on behalf of the Depositor.” This represents a shift away from certain prior crypto enforcement cases, although Corp Fin noted that its statement does not constitute a rule, regulation, guidance or statement of the full SEC, and does not have any “legal force or effect. See https://www.sec.gov/newsroom/speeches-statements/corpfin-certain-liquid-staking-activities-080525.

That same day, the SEC charged Huynh Tran Quang Duey, founder and owner of MyConstant, for falsely representing on MyConstant’s website that his company would invest funds in a low‑risk loan matching service, backed by crypto assets exceeding the value of the loan, promising annual returns of up to 10%. Those representations led to MyConstant raising over $20 million, much of which was allegedly used in ways inconsistent with Huynh’s representations. Hyunh agreed to pay $9.8 million in disgorgement and prejudgment interest, and a civil penalty of $750,000. See https://www.sec.gov/files/litigation/admin/2025/33-11382.pdf.

On August 26, 2025, the SEC secured a combined $46 million default judgment related to a 2022 case against MCC International Corp. (MCC) and related defendants. MCC allegedly induced investments into their crypto‑asset mining and trading operations through a complex, multi‑level marketing scheme centered on the purchase of “mining packages,” in return for which MCC guaranteed a profit‑sharing arrangement, which would be deposited into MCC back-office wallets. The scheme allegedly included instructing investors that in order to liquidate their investment, they must withdraw it via an MCC-created crypto asset made available on what the SEC referred to as a "fake crypto asset trading platform, which defendants allegedly failed to disclose was under their control and which allowed them to block MCC investors from liquidating their investments. See https://www.sec.gov/newsroom/press-releases/2022-81.

Also in August, the SEC formally closed its legal dispute with Ripple Labs after both parties agreed to drop their respective appeals in the long-running case involving the sale of XRP tokens. This action finalized a June 2025 agreement for Ripple to pay a $125 million civil penalty and puts an end to the lawsuit that accused the company of selling unregistered securities. A permanent injunction remains in place that restricts Ripple's institutional sales of XRP. See https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26369.