Legal
A new high-level appointment in the regulatory policy division of the Securities and Exchange Commission (SEC) is sure to raise concerns within the cryptocurrency industry. Is the regulatory vendetta against crypto about to intensify?
The SEC’s Division of Corporate Finance has announced the appointment of Mellissa Campbell Duru as its new Deputy Director for Legal and Regulatory Policy. Just as high-profile lawsuits targeting Ripple and Coinbase are playing out in the courts. The crypto industry in America badly needs more friends in high places – not enemies.
The SEC Chooses a Seasoned Lawyer
Duru has a Big Law background, and was previously a special counsel at the prestigious firm Covington & Burling. Prior to that role, she gained over 15 years of experience in various SEC posts.
She may stay on a similar regulatory track as Gensler. In her role at Covington & Burling, Duru co-authored a paper that explicitly praised Gensler’s “strong stance on cryptocurrencies” as chair of the agency. And called for lawmakers to take on even more power to rein in crypto firms and make them behave.
Hence, some are likely to see the appointment as another hammer-blow to the US crypto industry. There are many who find Gensler’s guidance unclear at best and outright hostile at worst. Now, the agency has added an official who, if her past publications are any guide, may emulate Gensler’s approach.
Crypto vs. SEC
Meanwhile, the struggle between the industry and the regulators churns on. Coinbase, one of the largest cryptocurrency exchanges in the world, has recently taken the SEC to court. The exchange hopes to force the regulator to provide greater clarity to rules around crypto.
Coinbase’s CEO Brian Armstrong recently accused Gensler of deliberate attempts to stifle the industry. “I don’t think [Gensler is] necessarily trying to regulate the industry as much as maybe curtail it,” Armstrong told CNBC. “There’s kind of a lone crusade… an anti-crypto view.”
The SEC is also in the midst of a high-profile court battle with Ripple over whether its token XRP is a security.
The outcome of that clash will have tremendous knock-on effects for the cryptocurrency industry. If the SEC wins, it would effectively make virtually all cryptocurrencies a security and put them under the jurisdiction of the SEC.
The CEO of Ripple has said its battle with the regulator will cost it at least $200 million.
