SEC’s Crypto Chief Resigns Amid Ongoing Regulatory Challenges with Ripple

• The U.S. Securities and Exchange Commission (SEC) witnessed a notable resignation today with the departure of David Hirsch, the Head of its Crypto Assets and Cyber Unit.
• Hirsch’s resignation follows closely on the heels of Ladan Stewart’s departure, signaling ongoing changes within the SEC’s crypto regulatory leadership.
• In a statement on LinkedIn, Hirsch expressed pride in the accomplishments of his team during his tenure at the SEC.

David Hirsch, head of the Crypto Assets and Cyber Unit at the SEC, steps down after nearly nine years, reflecting continuing shifts in the agency’s crypto regulation leadership.

SEC’s Leadership Shakeup: Hirsch Steps Down

In a significant development, David Hirsch, who led the Crypto Assets and Cyber Unit within the SEC’s Division of Enforcement, has announced his departure after nearly nine years of service. Hirsch broke the news on LinkedIn, expressing gratitude for the diverse and complex investigations he had been a part of during his tenure. He shared, “Last Friday marked my final day at the SEC. I am immensely proud of the historical work done by the Crypto Assets and Cyber Unit I had the privilege of leading.”

Continuing Departures: Ladan Stewart’s Exit

David Hirsch is not the first key figure to exit the SEC’s crypto regulation team recently. Earlier this year, Ladan Stewart, known for her involvement in high-profile cases against Ripple and Coinbase, also left the agency. Stewart now serves as a partner at the law firm White & Case LLP. The departures of Stewart and Hirsch signal a period of significant transition within the SEC’s ranks, particularly concerning its approach to crypto asset regulation.

SEC’s Influential Role in Crypto Regulation

The SEC’s regulatory stance has long been a focal point in the United States’ increasingly heated political discourse on cryptocurrency. SEC Chairman Gary Gensler has been a controversial figure among crypto enthusiasts due to the agency’s stringent regulatory measures. Recently, legislative pressure has mounted on the SEC to approve Ethereum-based exchange-traded funds, reflecting the broader tension between regulatory oversight and market innovation.

High-Profile Legal Battles: Ripple and Terraform Labs

The SEC has been embroiled in significant legal disputes, notably rejecting Ripple Labs’ proposal for a reduced penalty. Ripple sought a civil penalty substantially lower than the SEC’s suggested $876.3 million, citing disparities with the SEC’s settlement with Terraform Labs. The SEC countered that Terraform’s penalties were based on its bankruptcy status and its agreement to compensate investors, conditions Ripple has not met. The agency maintains that its proposed penalties for Ripple, which could exceed $2 billion, are consistent with the gravity of the alleged unregistered securities sales.

Conclusion

David Hirsch’s resignation underscores a period of transition within the SEC’s crypto regulatory framework. As the agency continues to play a pivotal role in shaping the future of cryptocurrency regulation in the United States, the departures of key figures such as Hirsch and Stewart may signal evolving approaches and strategies. Stakeholders in the crypto community should stay informed about these developments, as they will likely impact future regulatory policies and enforcement actions.