The US stock and values commission. UU. (SEC) is carrying out a large -scale retreat from much of the main cryptographic litigation that began under former President Gary Gensler, but not all are out of the hook.
At least four demands against cryptographic companies (Ripple, Kraken, Cumberland Drw and Pulsechain, remain in progress, and probes three other companies (Unicoin, Crypto.com and immutable, have not yet closed.
The SEC Commissioner, Hester Peirce, the leader of the newly created cryptographic work group of the agency, has already fulfilled his promise earlier this month of “unraveling” the SEC of several litigious lithigios related to cryptography. The agency agreed to withdraw its cases against Coinbase and Consensys, pending the approval of the commissioner, and has put its cases against Binance and Tron in Pause, since the parties consider a “potential resolution.”
The level of unprecedented activity in the SEC, since it goes back from cryptographic actions, illustrates “how far the pale was the last four years”, the legal director of Coinbase, Paul, Grewal, in an interview with Coindesk. “It is definitely something we had never seen before, but I think it’s well justified.”
During the last two weeks, several companies that previously received wells from Wells, essentially a regulator notice that aims to present the application positions, received news from the SEC that the investigations in them had closed, and the charges of compliance would not be presented against them. That list includes Robinhood Crypto, Uniswap decentralized protocol, non -fungible token market (NFT) Opensa and Crypto Exchange Gemini.
The open costumes
Although the SEC has retired from its accusations that Coinbase operated as a corridor and exchange of unregistered values, similar charges against Kraken have not yet been withdrawn. The SEC demanded Kraken in November 2023, accusing the firm of combining client and corporate funds while it operates as an unregistered stock corridor, compensation and distributor agency. A Kraken representative did not respond to the request for comments from Coindesk.
Similarly, the SEC demanded Cumberland DRW, the cryptogue trade arm of the Commercial firm DRW with headquarters in Chicago, last year for allegedly operating as an unregistered securities dealership. Don Wilson, the founder of DRW, promised to fight against demand at that time. A DRW representative declined to comment, telling Coendesk that the company currently does not have updates to share.
Read more: Who is afraid of Gary Gensler? No Don Wilson, the merchant who beat the regulator once before
The SEC sue Ripple in 2020 and was largely lost in 2023, when a New York judge ruled that XRP, when sold to retail investors, was not security. Subsequently, the SC appealed that decision. Although both Ripple executives and external experts have speculated that the agency will eliminate the appeal, the agency has not yet made any public statement about the case. A Ripple representative told Coindesk that the company currently has no updates to share.
Rebecca Fike, a Dallas -based partner in the Vinson & Elkins law firm and a former sec attornery of the SEC, told Coindesk that he expects the SEC to eliminate any of its pending cases that are based on the use of Howey’s test to collect a firm of offering unregistered values, especially when there are no findings of problems related to fraud of fraud.
“As for why some have been eliminated, it could be internal or court -based terms that are establishing priorities,” said Fieke. “There is also the possibility that some cases related to the cryptoy that seem to fit in the frame frame and that the SEC determines that they are based directly on fraud, that is, a promoter or CEO that says one thing but to do another with investor funds, could continue under a framework of traditional fraud.”
The SEC brought accusations of fraud and registration against Richard Schueler, better known as Richard Heart, Pulsechain, Pulsex and Hex in July 2023. There was a hearing on the motion of the accused to dismiss last October, and the judge supervised the case dismissed him last Friday, although she gave 20 days to modify it.
Open probes
Several of the SEC probes, investigations that have not yet led to positions presented, to cryptographic companies also remain open.
Crypto.com sued the SEC last October after he received a war notice. The firm voluntarily abandoned its demand two months later, shortly after CEO Kris Marzalek met with then elected president Donald Trump. Crypto.com did not respond to the request for comments from Coindesk.
Australian Blockchain Gaming and NFT Company Immutable also received a war notice last year related to the sale of their Token IMX in 2021, and promised to fight against any application position. Neither the company nor the SEC have made public statements about the state of the probe.
Unicoin also received a war notice last year informing the firm that the SEC planned to present positions that allege rapid violations, deceptive practices and the offer and sale of unregistered values. Unicoin did not respond to the request for comments from Coindesk.
Thinking about the future
The withdrawal of the SEC, as well as the cut of its cryptography compliance team, according to Fike, is an indication that the agency is moving away from the so -called “application regulation” approach to the cryptographic industry carried out by former President Gensler.
“I think the SEC is pointing through personnel that means what it now says: that cryptographic regulation will come through declarations and potential future regulation, not case application actions by case by case,” said Fike. “His hope, and mine, is that a setback of calling all cryptographic values and evaluating the cryptographic industry as a whole under the new working group of Commissioner Peirce will create some clarity about cryptographic regulation.”
While the sec is changing quickly, not everyone is happy. Gemini’s president and co -founder, Cameron Winkelvos, turned to X earlier this week to demand compensation for time and money that the exchange of cryptography spent defending against the investigation of the SEC. He suggested that the SEC reimburse Gemini triples their legal costs and publicly dismiss all personnel involved in the investigation.
According to Fike, this is probably an initial.
“I can’t imagine that SEC does that. It seems that it would be a difficult precedent to establish it and other agencies that try to regulate in new and emerging markets, ”said Fike. “It is important to keep in mind that new financial products can often be a source of fraud, and people/investors can be harmed by them. I think the SEC was trying to be present and active in a market of one billion dollars full of investors that may be afraid to “get lost”, but they do not necessarily have financial or technological knowledge to analyze the real cryptography opportunities of possible fraud. “
Fike continued, adding: “Many may disagree with the path they took, and Commissioners Peirce and Uyeda clearly do so, but they are also benefiting from some maturation in the cryptographic universe. I think it is good that the SEC is step back and seeks to create a better regulatory structure for cryptographic and digital assets, but I don’t think that means that their previous efforts were evil intentionally or worthy of punishment. “
