The SEC's retrenchment

The Securities and Exchange Commission is starting over Friday, hosting its first of a series of roundtables exploring the future regulation of crypto assets.

Why it matters: The agency has spent the first two months under the new administration making it clear that it intends to regulate by writing rules, rather than taking firms to court.

The big picture: Since Inauguration Day, which coincided with the departure of former SEC chair Gary Gensler, the securities regulator has backed off a lot of cases against crypto companies.

• If you put all these cases built up during the Biden administration together, it illustrates a strategy of going after key elements of the industry.
• It's like if you wanted to prevent movies from being made: You'd bring a case against a big talent agency, a few studios, a couple of theater chains and a distributor.
• The heart of the crypto industry is trading, and the SEC went after more exchanges than any other category.

Zoom in: Probably the most impactful move came in February when it dropped its case against Coinbase, in which the SEC alleged the exchange had failed to register. The court agreed to the withdrawal this month.

• This month it also dropped a case (in principle) against Kraken, another major exchange, over much the same issue.
• At the end of February, it closed an investigation into Uniswap Labs, which developed the leading decentralized exchange, Uniswap. (The business of Uniswap Labs is quite different than that of exchange operators.)

Then it turned to cases that went after other key infrastructure, including:

• OpenSea, the best-known NFT marketplace, which announced that the SEC had withdrawn an investigation into the firm. Presumably, it had been preparing to argue that NFTs are securities, which might make OpenSea another unregistered exchange.
• Cumberland DRW, a market maker, also announced a joint filing to end its case with the agency.

Zoom out: The retreat is starting to have ripple effects. Vermont also dropped its case against Coinbase over staking services.

What we're watching: Coin issuer Ripple's case with the SEC has been one of the most important, delivering an early win on trading on the secondary markets. The case had never been fully resolved, though one report came out that it was close.

• Another exchange, Crypto.com, last year said it was suing the agency after receiving a Wells Notice. But a spokesperson tells Axios that the suit was withdrawn in December. No update on the investigation, however.

State of play: In general, these cases have been over the bureaucratic issue of which activities require which kind of registration. Important, but not directly harmful.

• But two cases included more serious allegations of market manipulation. Both of these cases are stayed, not dropped.
• The parties asked for a stay in the SEC's case against the world's largest cryptocurrency exchange, Binance.
• And then there is another coin issuer, Justin Sun, and Tron, the controversial but popular blockchain, also under a mutually agreed upon 60-day stay.

The intrigue: Before the stay, Justin Sun invested heavily in World Liberty Financial, the crypto project associated with the Trump Organization.

• The White House directed Axios to the SEC on the issue, and the SEC declined to comment.

What's next: The SEC's policy drafting process will begin with meetings, public comment periods, the whole bit.