SEC Loses Top Lawyer as Ripple and Coinbase Lawsuit Takes New Twist

Wed, 21/02/2024 – 16:20

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The U.S. Securities and Exchange Commission (SEC) faces a huge loss as Ladan Stewart, a renowned lawyer who led the SEC’s crypto unit and spearheaded Coinbase Global Inc and Ripple Labs, departs the regulator to join White & Case. Stewart’s departure comes at a critical juncture as ongoing legal battles involving Coinbase and Ripple take new twists and turns. 


Stewart’s departure and impact

Ladan Stewart, an eight-year veteran of the SEC’s enforcement division, played a crucial role in shaping the regulatory ecosystem for cryptocurrencies. As the head of the SEC’s crypto and cyber litigation unit, Stewart led high-profile actions against Coinbase and Ripple, among others. 

The departure of Stewart from the SEC raises questions about the future direction of the regulatory body’s approach toward cryptocurrencies. Bloomberg’s ETF analyst Eric Balchuas speculates on the implications of Stewart’s emphasis on Bitcoin ETFs in her press release, suggesting potential shifts in regulation under Gensler’s leadership as chairman of the SEC.

One of Stewart’s notable actions during her tenure at the SEC was the lawsuit against Coinbase. Last June, the SEC filed a lawsuit against Coinbase, alleging that the exchange operated as an unregistered securities exchange, broker and clearing agency. 

The lawsuit has since entered a new phase, with Judge Failla questioning Coinbase and signaling a potential denial of their motion. This development could push the case into the discovery phase, where both parties will have the opportunity to gather evidence and present their arguments.

Ripple lawsuit continues amid regulatory uncertainty

Stewart was also involved in the SEC’s ongoing legal battle with Ripple over the status of its XRP token. Despite a key ruling last year in which a New York federal judge deemed XRP not to be a security when sold to the general public, the SEC has moved to appeal the decision. 

Ripple, on the other hand, requested an extension to produce documents related to the sale of XRP to institutional buyers, hedge funds and other entities. The legal proceedings are expected to continue with the submission of legal briefs in the coming months.


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