Current SEC crypto lawsuits could be dropped, lawyer says

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It’s SEC Chair Gary Gensler’s last month in office. A new SEC is on the horizon, one that’s potentially far more crypto-friendly. 

Here’s the thing: That doesn’t mean that the old actions (aka lawsuits) taken by the SEC just disappear overnight. It’s unfortunately not that simple. But what happens next is a loaded question right now. 

Haynes Boone’s Matthew Frankle does think there’s a possibility that we will see some of the cases dropped as the regulator recalculates how it plans to approach crypto. 

Frankle said he’s “taking a guess here, but I suspect that many of them will be dropped to the extent they can drop, right? I mean sometimes they actually can’t be dropped, but to the extent they could be dropped, I think probably they will be unless there’s … underlying fraud, and that’s what they’re going after.”

Tie that into Frankle’s belief that crypto will still be a big priority for the SEC and there’s potential for a totally different dialogue around regulation by this time next year.

A crypto-friendly regulator doesn’t mean less regulation, Frankle was careful to explain. 

“I don’t think it’ll be less, I think it’ll be smarter,” he told me. “We’re going to get some regulations, but it’s going to be to clarify things rather than to tell people, ‘hey, what you’re doing is wrong, and by the way, there’s no way you can do it right.’ That’s the big issue, right? You have these big players out there … [that] want to do it the right way, and the SEC is telling them, essentially, there is no way to do it.”

But if you had your heart set on Jan. 20 being the day everything changes, you might need to adjust your expectations. Frankle expects that it’s going to take some time, and we obviously need to see the new head of the SEC confirmed before we can really see the changes play out. 

Perhaps this is the year crypto learns patience. 

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