Regulation
SEC’s New Leadership Could Impact Ripple Case, Crypto Lawsuits, Ex-SEC Says
Former SEC attorney Marc Fagel recently shed light on how the Securities and Exchange Commission’s leadership changes could impact ongoing cryptocurrency lawsuits, including the high-profile Ripple case. His comments came in response to inquiries into whether current enforcement actions are influenced by the political climate or recent scandals. Additionally, the former SEC attorney also revealed the potential impact of the SEC’s new leadership on broader cryptocurrency regulation.
How Will the New SEC Leadership Impact the Ripple Case?
Popular cryptocurrency influencer Jungle Inc asked if a pro-crypto chairman were elected, would the new SEC administration change its approach to cryptocurrencies? The lawyer clarified that historically, a new SEC administration typically refrains from interfering with ongoing enforcement actions. For example, a change in leadership would not typically alter the course of the Ripple case or other pending legal proceedings.
However, Fagel noted that a new administration could change priorities for future cases. Nonetheless, he said that enforcement actions themselves are generally apolitical. Fagel said:
“Enforcement is generally apolitical: a violation of the law is a violation of the law, and most enforcement recommendations are approved unanimously. Cryptocurrencies may be different, and a new administration may take a different approach.”
Fagel also noted that if new policies or priorities arise, settlements or appeals could be affected. This suggests that if a crypto-friendly administration takes over, the Ripple case could be settled more smoothly. Additionally, the SEC could abstain from appeals if the ruling favors the blockchain payments company.
Furthermore, BinanceCoinbase, Consensys, and other SEC crypto lawsuits could also see a similar resolution. However, the legal path would still depend on the court’s findings. If there is proven misconduct, a pro-crypto administration would also have to crack down.
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Expected Changes in Cryptocurrency Regulation
The discussion touched on the SEC’s growing aggressiveness under the current chairman, Author: Gary Gensler. The SEC has stepped up its enforcement actions against the cryptocurrency industry. This marked a shift from the previous administration under Jay Clayton. The previous administration focused more narrowly on flagrant violations such as initial coin offerings (ICOs).
Additionally, SEC Commissioner Hester Pierce noted that they had little discussion about cryptocurrency enforcement at the time. Fagel attributed the increased scrutiny to significant fraud cases, including those involving FTX, Celsius, and Terra Luna. He then dismissed the idea of an SEC crackdown solely because of political figures like Senator Elizabeth Warren.
He stressed that the huge losses from these scandals have led to more stringent enforcement. Fagel acknowledged that while enforcement is usually apolitical, a new SEC
the administration could influence future political directions.
However, he warned that a less aggressive stance could backfire if another major scandal were to occur. That could force the SEC to step up its game again. “If they take a less invasive approach to crypto, all it takes is another FTX/Celsius and they’ll raise it again,” Fagel warned.
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