As the anticipated resignation of SEC Chair Gary Gensler approaches, industry experts predict a notable change in the landscape of securities lawsuits affecting crypto companies. According to Katrina Paglia, chief legal officer at Pantera, many lawsuits may “quietly go away” post-Gensler’s departure in January 2024. This potential shift ignites discussions on the future of crypto regulation and the implications for the sector.
During a recent panel discussion at the North American Blockchain Summit, Paglia asserted that in the wake of Gensler’s exit, there could be a series of settlements where defendants might not necessarily admit fault, stating, “The defendants will likely have to pay something along with ‘neither admit nor deny’ type language.” The settlement landscape could be quite beneficial for all parties involved as it alleviates the burden on the SEC, allowing them to focus their resources elsewhere.
Paglia emphasized the potential for the SEC to withdraw claims actively, although she noted that it might be a stretch to expect such motions to dismiss. More realistically, she indicated, the SEC will likely issue *no-action letters*, which would signify a cessation of legal action toward certain entities. Such letters would allow organizations to proceed with their operations without the looming threat of litigation.
As the industry holds its breath for these upcoming developments, there are whispers that SEC Commissioner Hester Peirce may step in to oversee crypto regulations until a new chair is appointed. Paglia mentioned, “We’re going to see her recommend some no-action letters,” foreshadowing a potentially more lenient approach towards crypto companies.
If this regulatory chill occurs as suggested, the crypto sector may experience a much-needed reprieve from the ongoing litigation turmoil that has plagued it under Gensler’s leadership. The panel’s insights lead to cautious optimism about the future, as companies hope for a more favorable regulatory climate moving into early 2024.
