"We can do better"...Changes brought by the U.S. SEC's posture shift [Hankyung Koala]

Minseung Kim's ₿Official

Why are we still stuck in the ICO era?

At some point, the crypto market clearly split into two. 'Major coins' like Bitcoin and Ethereum and new narratives not well captured by the establishment diverged in popularity and liquidity.

In 2023, only Bitcoin rose while well-known altcoins did not grow significantly. Amid an altcoin sideways market, degens (Degen, a slang term for investors in the crypto market who react sensitively to trend changes and seek high volatility) searching for alpha enjoyed volatility by finding a new narrative in meme coins. Bitcoin's dominance continued in 2024. As of 2025, Bitcoin and Ethereum rose first, then sparks moved to major altcoins. Degens who enjoyed meme coins have recently been flocking to a new theme called 'Perp Dex'.

What deserves attention is that this flow is all connected to regulatory changes in the United States. During the Biden administration, the Securities and Exchange Commission (SEC) pressured the entire crypto industry extrajudicially. This halted growth not only for major altcoins like Ethereum and Solana but also for large DeFi projects and exchanges like Coinbase and Binance. As altcoins repeatedly failed to launch new products for a long time and prices declined, what attracted investors' attention was instead meme coins with the idea that 'no whitepaper, no business plan is necessary. Attention is value.' Some read meme coins as a narrative of resistance to regulation in this context. Among altcoins, Solana was almost the only one to benefit from the meme coin ecosystem and grow.

In January 2024, the listing of a spot Bitcoin exchange-traded fund (ETF) formalized Bitcoin's dominance. A spot Ethereum ETF followed, but the SEC's stance that 'all virtual assets except Bitcoin are securities' and its questioning of the securities nature of staking made the rise sluggish. government-level investigations and threats suppressed the Ethereum ecosystem for a long time.

With the start of the Trump administration in 2025, the atmosphere changed. By designating stablecoins as a national initiative, related projects strengthened. Digital Asset Treasury (DAT) companies emerged, and expectations for spot altcoin ETFs also grew. Public declarations by the White House and major agencies such as the SEC, CFTC, OCC, and FRB to 'remove shadow regulation' energized the industry and affected investor sentiment. Institutions and companies bought Bitcoin and Ethereum, and major altcoins such as XRP and Solana also rose on expectations.

Meanwhile, on the other side of the market, the Perp Dex theme is strong. Perp Dex refers to decentralized exchanges that trade perpetual futures (Perp). While perpetual futures (Perp) and decentralized exchanges (DEX) are not new concepts individually, a Perp Dex called Hyperliquid became highly popular and its token, Hyperliquid (HYPE), rose over the long term. Following this, projects on the Base chain like Avantis (AVNT) and on the BNB chain like Aster (ASTER) also appeared, and Perp Dex is evolving into a narrative and a theme.

Why has Perp Dex become a theme now? The background includes the SEC's posture shift. From Trump’s first day in office, the SEC promised regulatory reform saying 'We can do better (SEC can do better),' and unlike the past when it filed many securities lawsuits, it has shown a very friendly stance. It has considered DeFi regulatory exemptions, declared 'Project Crypto' based on a White House report, and promised △allowing domestic trading of tokenized financial assets, △permitting super apps that encompass securities and non-securities, △establishing DeFi rules such as automated market makers (AMM), and △fostering an on-chain securities market. This is a direct boon not only for tokenization and the expansion of the RWA (Real World Asset) market but also for DEXs.

The long-term rise of Hyperliquid was also driven by buybacks. Using profits from the Hyperliquid exchange to buy Hyperliquid (HYPE) tokens on the market, such buybacks were significantly constrained under the Biden administration due to the SEC's flood of securities lawsuits. However, after Trump took office and the SEC shifted its stance, legal uncertainty improved. Hyperliquid generated profits from high trading volumes and allocated them to aggressive buybacks to drive token price increases, creating a flywheel effect that produced more loyal users for Hyperliquid. Avantis, Aster, and others are also expected to pursue similar strategies.

Thanks to U.S. regulatory reform, the global crypto market is enjoying a bull market on both sides. But Korean regulation still remains focused on blocking the 2017 ICO frenzy. Korean companies cannot create Perp Dexs or conduct buybacks. Korean stock investors still cannot trade spot Bitcoin ETFs. This is because the 'emergency measures on virtual currency' enacted around 2017 are still in effect. Despite two subsequent DeFi waves, NFTs, meme coins, ETFs and DATs, and Perp Dexs, the market has continuously evolved while we remain the same.

This week is Korea Blockchain Week (KBW), a festival for the crypto industry. Many foreigners will visit Korea again this year and ask about the Korean market and its systems. But we will again give ambiguous answers like 'it's not legally prohibited but you shouldn't do it' or 'you may be allowed to do it or you may not.' In the end, the benefits of innovation and development will again go mainly to foreigners.