John Reed Stark believes that Cryptocom has made a huge mistake by filing a lawsuit against the US Securities and Exchange Commission (SEC). The ex-SEC official does not see the possibility of a win for the exchange and broader cryptocurrency ecosystem. Rather, he predicted three potential events that are likely to follow the suit.
Cryptocom Repeats Consensys Lawsuit Against SEC
Stark suggested that Cryptocom demonstrated “insanity” by repeating the same mistake ConsenSys made. He highlighted that the latter tried to stop the agency from suing it just after receiving a Wells Notice. Ordinarily, the expectation is that the exchange would file a lawsuit afterward.
Instead, Consensys filed a lawsuit against the regulator in a Texas federal court. However, its case was dismissed in favor of the Commission.
In the ex-SEC official’s opinion, Cryptocom is “doing the same thing over and over again and expecting different results.”
Unfortunately, Stark does not see the possibility of any different result. Like in the case of ConsenSys, Stark predicts that the crypto exchange’s lawsuit against the SEC will be dismissed on the basis of the lack of “ripeness.”
Next, he predicted that the agency will file a full enforcement action against the exchange in the coming weeks. Should this happen, Cryptocom may enter into a season of legal debacle, requiring the services of several lawyers. Stark does not think these lawyers will be capable of getting Cryptocom victory in the “legal farce.”
His final prediction is that these lawyers representing the exchange would buy beach houses from the fees accrued during the trial. The ex-SEC official’s prediction suggest to Cryptocom and other crypto exchanges that suing the SEC is never a great idea.
At the same time, a stronger argument could help Crypto.com overthrow the SEC.
Crypto Firms Pay Millions of Dollars in SEC Settlements
Over the years, several crypto firms have come under the radar of the SEC and were forced to enter a settlement with the regulator. A few weeks ago, Judge Analisa Torres ruled that blockchain payment firm Ripple should pay $125 million as penalty in its long draw lawsuit with SEC.
Similarly, Mango DAO was asked to pay $700,000 as part of Mango Market’s settlement with the US SEC for their unregistered MNGO token sales. In a recent development, the Mango DAO has rejected the proposal. This move, coupled with that of Cryptocom against the SEC, reflects the changing landscape of crypto firms and regulators.
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