A prominent SEC attorney who spearheaded litigation against Ripple and Coinbase has announced her departure from the commission, resulting in a major setback for the agency.
Ladan Stewart, SEC’s head of crypto litigation unit, has left the commission. Following Stewart’s departure, she joined White & Case, an international law firm that advised Fidelity Investments on its Bitcoin ETF filings.
The development was shared by Bloomberg’s Senior ETF analyst Eric Balchunas, who pointed out that Stewart mentioned Bitcoin exchange-traded funds in a press release regarding her departure.
Ladan Stewart, who led the SEC’s crypto unit and actions against coinbase and ripple, is leaving regulator to join White & Case in the white collar division to lead crypto group. This is firm that advised Fidelity in bitcoin ETF. Via @JustinFWise https://t.co/Lo5jdPPaTV pic.twitter.com/HdNfLuQkVM
— Eric Balchunas (@EricBalchunas) February 21, 2024
Her comment raises questions about the SEC’s regulatory approach towards cryptos in the future. Besides playing a crucial role in shaping the U.S. crypto landscape, she also made significant contributions to other crypto-related matters.
Stewart’s Involvement in Ripple Case
Being the head of SEC’s crypto litigation unit, Stewart was involved in the commission’s legal tussles against Ripple and Coinbase. Recall that the SEC sued Ripple in December 2020, at a time when Stewart was part of the commission’s enforcement division.
The regulator alleged that Ripple offered and sold XRP as an unregistered security. However, the judge rejected most pleas made by the SEC while declaring that XRP in itself is not a security.
Stewart’s departure is coming at a critical time when the court is close to determining the appropriate penalty that will be leveled against Ripple following its securities law violation via its institutional sales of XRP.
The remedies-related discovery ended on February 20, with the parties preparing to file the relevant legal briefs in March.
Her Role in Coinbase Lawsuit
Similarly, Stewart also played a major role in the SEC’s legal battle against San Francisco-based exchange Coinbase.
As reported last June, the SEC charged Coinbase with violating federal laws by operating as an unregistered national securities exchange, clearing agency, and broker.
The commission also accused Coinbase of facilitating the trading of 10 crypto assets deemed as unregistered securities. Coinbase denied the allegations and subsequently filed a motion to dismiss the lawsuit.
A hearing regarding Coinbase’s dismissal pleading was held last month in a Manhattan federal court, with U.S. District Judge Katherine Failla expected to issue a decision soon.
Meanwhile, Stewart’s departure could negatively impact the commission’s litigation strategies in the Coinbase and Ripple lawsuits going forward, as her role in both lawsuits has officially ended following her exit from the agency.
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