The U.S. Securities and Exchange Commission (SEC) has dropped crypto activities from its agenda for compliance exams in the year ahead.
The SEC’s division of examinations published its priorities for fiscal 2026, setting out the areas that it plans to focus on in its reviews of industry firms, and highlighting possible sources of heightened risk for the industry.
Last year, in its priorities for fiscal 2025, the regulator singled out the crypto sector, and the mainstream investment industry’s crypto offerings as an emerging source of risk. It also signalled its intention to ensure that firms’ offerings, advice and trading in crypto complied with prevailing conduct standards (for retail investors generally, and senior investors in particular), disclosure requirements, custody and valuation rules.
“In particular, examinations of broker-dealer practices will focus on those recommended products that are complex, illiquid, or present higher risk to investors,” it said — citing cryptoassets, along with other alternative investments, as specific products of concern.
This year, the SEC has entirely eliminated any mention of crypto in its current priorities, and crypto is also the only emerging risk from 2025 that has been dropped this year.
The agency will continue to examine retail sales practices, including compliance with the industry conduct standards, known as Regulation Best Interest (Reg BI). And, while it said that these exams will focus on complex products, such as alt investments, and products that are based on exotic and/or illiquid assets, it specifically dropped its reference to crypto as a topic for these reviews.
Similarly, its reviews of investment advisers will target compliance with fiduciary standards, and will focus on the sale of complex products. That includes a focus on alt investment funds, ETFs based on illiquid assets and higher-cost products — but crypto is not mentioned as a particular concern.
Risks associated with emerging financial technology remains an issue flagged in the report, but the regulator’s focus here will be the use of automated investment tools, AI technologies and trading algorithms by platforms that provide automated investment advisory services.
“With respect to AI, the division will focus on recent advancements in AI and will review for accuracy registrant representations regarding their AI capabilities,” it said. It added it will also “assess whether firms have implemented adequate policies and procedures to monitor and/or supervise their use of AI technologies, including for tasks related to fraud prevention and detection, back-office operations, anti-money laundering (AML), and trading functions…”
The SEC said that its exams in fiscal 2026 will also review compliance with new rules, and will prioritize reviews of newly registered firms.
“Examinations are an important component to accomplishing the agency’s mission, but they should not be a ’gotcha’ exercise,” said SEC chairman, Paul Atkins, in a release.
“Today’s release of examination priorities should enable firms to prepare to have a constructive dialogue with SEC examiners and provide transparency into the priorities of the agency’s most public-facing division,” he added.