Regulation

Ex-SEC Reveals New SEC Leadership Impact On Ripple Case, Crypto Lawsuits

Published

8 months ago

July 29, 2024

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Marc Fagel, a former SEC lawyer, recently shed light on how shifts in Securities and Exchange Commission’s leadership may impact ongoing crypto lawsuits, including the high-profile Ripple case. His comments came in response to inquiries about whether current enforcement actions are influenced by the political climate or recent scandals.

How Will New SEC Leadership Impact Ripple Case?

Jungle Inc, popular crypto influencer, asked if a pro-crypto president is election, will the new SEC administration change approach toward crypto. The lawyer clarified that historically, a new SEC administration typically refrains from interfering with ongoing enforcement actions. For instance, a change in leadership would not usually alter the course of the Ripple case or other ongoing lawsuits.

However, Fagel noted that a new administration might change priorities for future cases. Nonetheless, he affirmed that enforcement actions themselves are generally apolitical. Fagel stated:

“Generally enforcement is apolitical – a violation of the law is a violation of the law, and most enforcement recommendations are approved unanimously. Crypto might be different, and a new administration could take a different approach.”

Fagel also noted that in case of new policies or priorities, the settlements or appeals could be influenced. This suggests that if a crypto-friendly administration takes over, the Ripple case settlement could be smoother. Furthermore, the SEC could refrain from appeals in case the ruling is in favor of the blockchain payments firm.

Moreover, Binance, Coinbase, Consensys and other crypto lawsuits by the SEC could also see a similar resolution. However, the legal course would still depend on the court findings. In the case of proven misconduct, even a pro-crypto administration would have to crack down.

Also Read: Gemini Co-Founder Warns of Kamala Harris’ ‘Big Bluff’ to Crypto Industry

Expected Changes In Crypto Regulation

The discussion touched on the increasing aggressiveness of the SEC under the current Chairman, Gary Gensler. The SEC has ramped up enforcement actions against the crypto 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).

Moreover, SEC Commissioner Hester Pierce noted that they had very little discussion on crypto enforcement at the time. Fagel attributed the heightened scrutiny to significant fraud cases, including those involving FTX, Celsius, and Terra Luna. Hence, he dismissed the notion of SEC crackdown solely due to political figures like Senator Elizabeth Warren.

He emphasized that the huge amounts of losses due to these scandals have led to the tightened enforcement. Fagel acknowledged that while enforcement is usually apolitical, a new SEC administration could influence future policy directions.

Nonetheless, he cautioned that a less aggressive stance might backfire if another major scandal occurs. This could force the SEC to intensify its actions once again. “If they take a more hands-off approach on crypto, all it takes is one more FTX/Celsius, and they’re going to ratchet it up again,” Fagel warned.

Also Read: Ripple Vs SEC Case: Judge Torres Deliberates On Final Ruling