Uncertain Regulations, Definite Impacts: The Impact of the U.S. Securities and Exchange Commission's Regulatory Interventions on Crypto Assets

Aman Saggu, Lennart Ante and Kaja Kopiec

Finance Research Letters, 2025, vol. 72, issue C

Abstract: This study employs an event study methodology to investigate the market impact of the U.S. Securities and Exchange Commission's (SEC) classification of crypto assets as securities. It explores how SEC interventions influence asset returns and trading volumes, focusing on explicitly named crypto assets. The empirical analysis highlights significant adverse market reactions, notably returns plummeting 12 % over one week post-announcement, persisting for a month. We demonstrate that the severity of market reaction depends on sentiment and asset characteristics such as market size, age, volatility, and illiquidity. Further, we identify significant ex-ante trading volume effects indicative of pre-announcement informed trading.

Keywords: Cryptocurrency; Securities and exchange commission (SEC); Regulations; Event Study; Enforcement (search for similar items in EconPapers)
JEL-codes: G12 G14 G15 G18 K22 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324014429

DOI: 10.1016/j.frl.2024.106413

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