SEC Commissioner Mark Uyeda: Withdraw Old Cases to Preserve Credibility
SEC Commissioner Mark Uyeda stated that the commission has withdrawn several crypto-related lawsuits inherited from the previous administration, as continuing to defend legal interpretations that are about to be overturned would damage the agency's credibility.
Speaking at the Georgetown University Financial Markets Quality Conference, he emphasized that litigation lawyers should not stand in court facing an impending "180-degree opposite" interpretation from the commission. He also mentioned significant doubts about the legal basis for previous crypto cases. Uyeda will serve as acting chair from January to April 2025, while Paul Atkins continues as commissioner after confirmation.
The actual withdrawals are concentrated in early 2025. The lawsuit against Coinbase was withdrawn on February 21; lawsuits against Kraken, Consensys, and Cumberland DRW were withdrawn on March 27 in a prejudicial manner, with the same facts not being subject to further litigation. The commission stated in writing at the time that the withdrawals were to facilitate its reform of crypto regulation, rather than an assessment of the merits of the complaints. The New York Times later reported that the current commission inherited 23 crypto cases, of which about 60% were withdrawn, frozen, or settled favorably.
Uyeda referred to the "innovation exemption" for tokenized securities as a pilot program. On September 17, 2026, the commission approved a five-year conditional temporary exemption allowing tokenized securities venues to trade tokenized national market system stocks in licensed automatic market makers and liquidity pools, temporarily not recognized as exchanges, and qualifying liquidity providers temporarily not recognized as dealers. The exemption sets limits on the number and volume of underlying assets, requires public notification, trading transparency, market closure coordination, record-keeping, and technical safeguards, and mandates regular publication of price, size, time, pool address, and daily trading volume in USD. Issuers may opt out. The commission is also soliciting public feedback to gather data for subsequent formal rules.
Chairman Paul Atkins positioned this exemption as the first step in moving some U.S. stock trading onto the blockchain after the clarity bill failed to advance in Congress. Commissioner Hester Peirce referred to it as a limited experiment to observe how on-chain and traditional markets interact. Conditions include that venues must be U.S.-based and comply with sanctions from the Office of Foreign Assets Control.
In terms of market mechanisms, sellers previously defined the boundaries of securities through enforcement, while buyers need trading venues and market-making qualifications for tokenized stock platforms, brokers, and traditional financial institutions. Resources for funding and compliance are shifting from litigation to applying for exemptions, building licensed liquidity pools, and disclosure systems. The events are driven by policy changes rather than the fundamentals of individual companies. Beneficiaries include new entrants and traditional institutions with existing compliance capabilities that can engage in secondary trading of tokenized U.S. stocks; those under pressure are off-exchange structures still operating under old interpretations or unable to meet licensing and transparency conditions.
The New York Times' analysis of data up to the end of FY 2025 shows that no new federal crypto lawsuits were initiated during the second Trump term, contrasting with 69 court cases from the previous term.
Source: Public Information
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Uyeda has been a commissioner since 2022 and has long opposed expanding the definition of securities through new theories. In early 2025, he, as acting chair, pushed to withdraw cases against Coinbase, Kraken, Ripple, Consensys, etc., changing the approach from "enforcement regulation" to withdrawing lawsuits before establishing rules. This sequence contrasts with Gary Gensler's approach of suing first and then providing explanations, and it transforms the commission's historical claims in court into burdens that subsequent rules must sever.
Both capital and institutional resources are being redirected: the enforcement budget is shifting from evidence collection and prosecution to exemption reviews, data disclosures, and a five-year observation period; on the market side, legal fees and settlement reserves are being reallocated to tokenized stock venues, automatic market-making pools, and sanctions screening systems. The motivation is to avoid the same agency providing contradictory definitions for the same product in adjacent years, as this would make subsequent formal rules more susceptible to judicial review. After the clarity bill failed to advance in the Senate, the commission opted to create a temporary pathway using the exemption authority under Section 36 of the Securities Exchange Act of 1934.
Recent examples include limited exemptions for crowdfunding and alternative trading systems in the 2010s, as well as the Commodity Futures Trading Commission's temporary no-action letters for certain derivatives venues. In terms of industry positioning, U.S. securities regulation has shifted from treating most tokens as unregistered securities to allowing a pilot period for secondary trading of national market system stocks in licensed blockchain pools, with traditional exchanges, market makers, and crypto producers placed under the same set of conditional tracks.
Structural changes belong to regulatory changes. When enforcement equals rules, boundaries are defined by individual case complaints; once the commission acknowledges that old interpretations will be overturned, pricing power shifts from litigation trials back to written exemptions and future rule texts. The mechanism is that credibility is inherent to the regulatory product itself, and contradictions in court will reduce the enforceability of subsequent rules, so it is essential to clear old cases first before making tokenized trading a controlled experiment from which data can be collected.
ABAB News · Cognitive Law
- When rules are not yet written, old lawsuits are liabilities.
- Credibility is more expensive than winning a lawsuit.
- Pilots are not relaxations; they are reclaiming experimental authority back to regulators.