- Former SEC official John Reed Stark suggests the Ripple lawsuit may be dismissed soon.
- The SEC has dropped multiple crypto-related lawsuits and enforcement actions.
- The agency is still waiting for other internal groups it created to be responsible for cryptocurrencies to complete its guidelines.
The U.S. Securities and Exchange Commission (SEC) has slowed its aggressive enforcement against crypto businesses. John Reed Stark, a former SEC official, noted this shift. He pointed out that the commission is no longer pushing its previous strict stance.
Recently, the SEC dropped its lawsuit against Coinbase and paused legal actions against Binance. It also ended investigations into Uniswap and OpenSea. Additionally, the agency dismissed two appeals about whether crypto businesses qualify as securities dealers. These moves indicate a change in regulatory priorities.
SEC spokesperson stated that dismissing these cases helps prevent market disruptions. The agency is now reviewing its overall approach to crypto regulation. Experts believe this shift may continue under acting SEC Chair Mark Uyeda.
SEC Freezes Five Crypto Cases
The SEC has halted five major crypto-related enforcement cases in recent weeks. Stark described this as a significant move, suggesting a major shift in regulatory strategy.
This move is consistent with the SEC’s current process of weighing on cryptocurrencies regulation. Currently, commissioner Hester M. Peirce is heading a working group to elaborate a new approach to digital assets. Until this process is done, the SEC is refraining from new cases that classify digital assets into securities.
Analysts believe this pause is temporary rather than a complete change in policy. However, it reflects growing uncertainty about how the SEC will regulate crypto assets. The final decision will depend on the task force’s recommendations.
Ripple Lawsuit May Be Next to Be Dropped
Stark suggested that the SEC may dismiss the Ripple lawsuit soon. The agency has not confirmed this possibility, but recent actions suggest it is likely.
Legal experts say the Ripple case is more complex than other recent dismissals. The court previously ruled that Ripple’s programmatic sales of XRP were not securities. However, the court fined Ripple $125 million for violating securities laws through institutional sales. Judge Torres also placed an injunction on future institutional sales.
Attorney Cherry Empress believes both parties might negotiate a lower penalty before dismissing the case. Meanwhile, the SEC filed its appeal in the Ripple case just days before Gary Gensler resigned. Ripple is expected to respond by April 2025.
Future of SEC Crypto Regulation
The SEC’s recent decisions suggest a shift in its approach to crypto regulation. The agency is waiting for the task force to finalize a clear framework. Until then, further enforcement actions may remain on hold.
If the SEC dismisses the lawsuit, it could signal a softer regulatory stance. However, future policies will depend on the final recommendations of the crypto task force.
