Crypto Titans Turn on Attorneys As SEC Exodus Sparks Tensions!
In a dramatic twist in the world of crypto, industry giants are gearing up for a showdown. Crypto companies are threatening to unleash a wave of retribution against law firms that dare to hire attorneys from the outgoing Biden administration—those who attempted to rein in their booming sector through rigorous enforcement actions.
Leading the charge, Coinbase’s CEO and Ripple’s chief legal officer have taken to social media, rallying support to blacklist any lawyers transitioning from the Securities and Exchange Commission (SEC) or other federal agencies that have targeted their businesses with lawsuits.
“We’ve made it clear to all our law firms: if they bring on board anyone who has participated in these unfair actions from the previous administration, we’ll sever ties immediately,” declared Brian Armstrong, CEO of Coinbase, the largest crypto exchange in the United States, in a powerful post on X.
Stuart Alderoty, the chief legal officer at Ripple, echoed these sentiments in a comment on X the same day.
“Avoid hiring any lawyer who was involved in suing a crypto company or project,” Alderoty urged. He added, “If you supported the SEC’s lawsuits against any crypto company or its leaders, you should stay off our radar. Need a list? My DMs are open.”
The SEC has taken action against industry heavyweights like Coinbase and Ripple, alleging they offered tokens to investors outside federal securities laws. This aggressive stance has positioned these companies at the forefront of the SEC’s campaign to regulate crypto under the same rules that govern traditional securities.
However, these companies maintain that crypto is distinct from existing financial instruments and are eager to collaborate with regulators to develop a tailored framework. They argue that crypto should be treated more like a commodity or collectible. Their frustration with the SEC’s enforcement-first approach, which casts them as adversaries without clear guidelines, is palpable.
“Leading with enforcement before establishing clear regulations leads to unpredictable outcomes that lack meaningful precedents,” Coinbase stated in a petition it filed in 2022, urging the SEC to engage in crafting a new regulatory landscape.
With the prospect of a new administration on the horizon, the crypto industry is hopeful. The incoming Trump administration has indicated a willingness to embrace a crypto-friendly approach and has appointed key figures that align with this vision.
Among these appointments is hedge fund chief Scott Bessent as Treasury Secretary and Canter Fitzgerald CEO Howard Lutnick as Commerce Secretary—both vocal advocates of Bitcoin.
On December 4, Trump nominated Paul Atkins as the head of the SEC. A former commissioner, Atkins has been a staunch proponent of crypto and will succeed Gary Gensler, who is set to retire in January.
According to The Wall Street Journal, “Trump’s return to the White House signals a new era for crypto—one with fewer regulatory hurdles.”
One of Atkins’ first moves might be to dismiss the SEC’s lawsuits against Coinbase and Ripple, paving the way for new regulations, the Journal noted.
“The SEC wasted critical time by acting like a beat cop instead of championing a new regulatory framework,” the Journal quoted Sarah Hammer, executive director at the University of Pennsylvania’s Wharton School.
As Gensler doubles down on enforcement, he appointed Jorge Tenreiro as the SEC’s chief litigation counsel, putting him at the forefront of the legal battles against Coinbase and Ripple.
“The SEC has signaled it will not back down,” declared CoinPedia in a December 3 report.
As the stakes rise, law firms are feeling the pressure from the crypto sector.
Armstrong from Coinbase specifically called out Milbank LLP for hiring SEC’s former enforcement chief, Gurbir Grewal, in October. “Milbank… messed up by bringing Gurbir on board. We’re cutting ties and will never work with them again as long as he is there. It’s unethical to undermine an industry and provide no clear rules to follow,” he stated.
When Grewal’s hiring was announced, George Canellos, global head of Milbank’s litigation and arbitration group, praised his credentials.
“It’s hard to imagine a better fit for our firm and clients,” Canellos said. “Gurbir exemplifies the qualities we value most—creativity, public spirit, collegiality, and unwavering dedication to our clients. His addition strengthens our already robust team of former government officials and experts in white-collar crime and regulatory enforcement.”
As the tension escalates, all eyes are on the crypto industry and its ongoing battle with regulators. Will the new administration pave the way for a more harmonious relationship? Only time will tell.
