A key member of the US Securities and Exchange Commission (SEC) legal team, Ladan Stewart, has left her role at the agency to join a pro-crypto law firm, Bloomberg Law reported on February 21.
Stewart, who has served as Regional Trial Counsel in the SEC’s Crypto Assets and Cyber Unit since September 2022, has joined White & Case as a partner to build a crypto and cyber defense practice.
In a statement to Bloomberg, she said:
“Crypto is here to stay – that has become very clear with the launch of a slew of Bitcoin exchange-traded funds…Given the complexity and turbulent enforcement arena, legal questions surrounding crypto will be at the forefront for some time to come.”
Stewart joined the SEC in 2015 and was part of the SEC attorney team in the regulator’s case against Ripple, which involved the securities status of the associated XRP token.
Stewart also led the SEC’s ongoing lawsuit against Coinbase, and recent legal filings indicate she will withdraw from that case.
According to the report, Stewart’s new law firm has represented several high-profile clients, including Microsoft, GoldenTree Asset Management and pharmaceutical company Abbvie Inc.
Bloomberg ETF analyst Eric Balchunas noted that elsewhere White & Case advised Fidelity on the creation of its spot Bitcoin ETF (FBTC), which received approval in January. The law firm was also involved in Celsius’ now completed bankruptcy case.
White & Case member Joel Cohen praised Stewart, saying her experience is “an important asset given the increased scrutiny of the crypto industry in recent years.”
SEC faces new lawsuit
It is unclear whether this development supports the idea that the SEC’s ability to regulate through enforcement is weakening. The news comes months after a November 2023 report suggesting the SEC is struggling to hire crypto experts, partly due to its ban on holding cryptocurrencies.
Meanwhile, the regulator is facing a new lawsuit filed in Texas by crypto company Lejilex and the Crypto Freedom Alliance of Texas (CFAT). The lawsuit accuses the SEC of exceeding its authority in regulating digital assets, Reuters reported on February 21.
Lejilex wants to launch a crypto exchange and is challenging the SEC’s classification of digital tokens as securities, a position that runs counter to the SEC’s actions against prominent exchanges such as Coinbase and Binance.
The plaintiffs challenge the SEC’s interpretation of digital assets as “investment contracts” and argue for the application of the “big questions” doctrine, which limits major regulatory actions without express authorization from Congress.