SEC Maintains Firm Stance on Cryptocurrency Regulation

The regulatory landscape for digital assets in the United States remains complex, yet the SEC is likely to continue its relatively stringent approach. This is reported by Fortune, citing a statement from former head of the SEC’s cryptocurrency litigation division, Ladan Stewart. 

For over eight years, she dealt with legal matters at the SEC, including high-profile cases against Ripple and Coinbase. In February, Stewart left the agency to join the prominent law firm White & Case. 

During a speech at a Columbia Business School conference, she expressed her views on the agency’s controversial approach to blockchain. According to her, the regulator’s chairman, Gary Gensler, believes that existing securities rules are quite sufficient for the digital asset industry. 

Stewart noted the recent dismissal of Coinbase’s lawsuit against the SEC, through which the exchange sought a response to a petition filed in July 2022. In it, the company demanded the agency provide clarity on crypto industry regulation.

The attorney emphasized that this court decision “will embolden” the Commission: 

“It will likely give the SEC the comfort it needs to continue acting in the same manner. [Gensler] is not going to shy away from initiating regulatory actions in the crypto space.”

She also acknowledged that one of the lawsuits filed against companies like Ripple and Coinbase is likely to reach the Supreme Court. However, the key question of defining a security remains unresolved, Stewart emphasized. 

In her personal opinion, a token plus “everything around the token” constitutes a security. 

During the discussion, Stewart and Polygon Labs’ Director of Legal and Policy, Rebecca Rettig, discussed the SEC’s lawsuit against Uniswap. Rettig clarified that this is not the first case against a project from the DeFi segment — in 2018, the regulator initiated proceedings against the founder of EtherDelta. 

Earlier, experts in comments to ForkLog discussed the potential consequences of the SEC’s confrontation with Uniswap. Some considered the case “doomed to fail,” while others pointed to risks for DeFi.