- Former U.S. Securities and Exchange Commission (SEC) attorney John Reed Stark has predicted that the agency will abandon its high-profile cryptocurrency lawsuits
- Stark highlighted the SEC’s recent pattern of pausing enforcement actions against Coinbase and Binance, suggesting a broader shift in its approach
- Internal restructuring at the SEC, including changes to its crypto enforcement division, signals a deprioritization of digital asset cases
Former SEC attorney John Reed Stark has publicly speculated that the agency is preparing to drop its remaining cryptocurrency lawsuits, including its appeal in the Ripple case. Stark’s comments come after the SEC has already paused its legal actions against Coinbase and Binance, a move he believes indicates a broader shift away from aggressive crypto enforcement. Additionally, recent internal changes at the SEC further suggest that digital asset cases are no longer a priority for the agency.
“Winningest Trial Attorney in SEC History” Sent Packing
Stark, who previously led the SEC’s Office of Internet Enforcement, took to X to express his view on the agency’s shifting stance, noting that the agency has asked to halt critical cases while also dismissing key attorneys from its roster:
Breaking News: SEC Coinbase Case “Paused” (Just Like the SEC’s Binance Case). Expect the SEC to Similarly “Pause” the Ripple Appeal Soon. The Writing is Now on the Wall: SEC Crypto-Enforcement Has Officially Expired.
On Friday, the U.S. Securities and Exchange Commission (SEC)… pic.twitter.com/PCcwX4oBaH
— John Reed Stark (@JohnReedStark) February 17, 2025
Stark stated his expectation that, following the halting of the Binance and Coinbase cases, the SEC will also halt its appeal against the ruling in favor of Ripple in 2023, which he expects to come in short order. Such an outcome is boosted by the news that Jorge Tenreiro, the SEC’s lead litigator, has been moved to another department:
Yet, this SEC trial lawyer, who championed the victories of Coinbase and Binance, is now glaringly absent from both the Coinbase and Binance pleadings, ordered to pack his pencils and legal pads and transfer to the SEC’s IT department.
Stark Reed commented on the SEC v Ripple case shortly after the ruling in 2023, expressing a belief that the verdict “resides on shaky ground,” claiming that the court took into consideration the cryptocurrency community’s perspective on the SEC’s inconsistent application of the Howey Test to tokens in the secondary market.
Regulatory Shift and Internal Restructuring
Beyond the recent case pauses, Stark also pointed to key structural changes within the SEC that support his theory. The agency recently rebranded its Crypto Assets and Cyber Unit to the Cyber and Emerging Technologies Unit, a move that suggests crypto-related enforcement is no longer a top priority. “The SEC’s crypto enforcement squad has been reassigned and renamed,” Stark noted, interpreting this as further evidence of a shift in policy.
This restructuring indicates that the agency may be redirecting its resources toward broader cyber and fintech-related enforcement rather than focusing exclusively on cryptocurrency firms. This is evidenced by the creation of a Crypto Task Force, headed by SEC commissioner Hester Peirce, which the SEC cited in its rationale to pause the Binance and Coinbase cases.
