SEC Retreats from Major Crypto Litigation, Several Lawsuits and Probes Remain
The U.S. Securities and Exchange Commission (SEC) is retracting many crypto-related lawsuits initiated under former Chair Gary Gensler, although some cases remain active.
- Four lawsuits against Ripple, Kraken, Cumberland DRW, and Pulsechain are ongoing.
- Investigations into Unicoin, Crypto.com, and Immutable have not concluded.
- The SEC plans to drop cases against Coinbase and ConsenSys, pending commissioner approval.
- Cases against Binance and Tron are paused for potential resolution discussions.
SEC Commissioner Hester Peirce leads the new Crypto Task Force, aiming to reduce the agency's involvement in crypto litigation. Recent closures include investigations into Robinhood Crypto, Uniswap, OpenSea, and Gemini.
Ongoing Cases
- Charges against Kraken for operating as an unregistered platform and mixing customer funds remain unresolved.
- Cumberland DRW faces allegations of being an unregistered securities dealer.
- Ripple’s case has seen mixed outcomes, with a judge ruling that XRP is not a security for retail investors; however, the SEC has appealed this decision.
- Pulsechain faced fraud and registration allegations, with a judge recently dismissing part of the case but allowing the SEC to amend it.
Open Investigations
- Crypto.com dropped a lawsuit against the SEC after receiving a Wells notice.
- Immutable received a Wells notice regarding its IMX token sale but has not disclosed recent updates.
- Unicoin also received a Wells notice related to alleged fraudulent practices and unregistered securities.
The SEC’s shift indicates a move away from “regulation by enforcement” towards clearer regulatory frameworks for crypto. However, criticisms persist, particularly from companies like Gemini, which request compensation for legal expenses incurred during probes.
Legal experts expect the SEC to focus on future rulemaking rather than individual enforcement actions as it seeks to establish clarity in crypto regulation.