The departure of the former president of the Securities and Exchange Commission (SEC), Gary Gensler, did not end the regulatory approach compared to the agency’s cryptographic industry.
According to Justin Slaughter, Vice-President of ParadigM’s regulatory affairs and former SEC advisor and Commodity Futures Trading Commission (CFTC), current prosecutions at the level of the cryptographic exchanges, in particular Coinbase, illustrate that the efforts to apply the law have shifted rather than ceased.
Slaughter underlines This regulatory pressure has moved to the level of the state with the new federal direction. He noted that this dynamic is common during American political transitions, where outgoing federal officials and aligned external groups encourage state actors to continue to continue unrexquiced agendas.
Slaughter also stressed that legal proceedings for the Crypto exchanges will only end the federal legislation adopted.
The case of Oregon against Coinbase
Slaughter quoted the Attorney General of Oregon Coinbase trial as proof of how the regulatory application persists at the level of the state. Although Oregon did not reach the original coalition of ten states which continued Coinbase alongside the dry in 2023, it has now filed a separate action based on the law of the state.
According to Slaughter, Oregon’s complaint reflects the previous case of the dry against Coinbase, often reproducing language and almost word arguments for word, including descriptions of business decisions and blockchain technology.
However, the Oregon General of Oregon’s office has made several targeted changes to distinguish its file, including the reduction in references to “cryptographic asset titles”, a term widely used by the dry but criticized by the cryptographic industry as imprecise.
The complaint of Oregon only mentions the sentence three times, against 37 instances in the initial complaint of the dry.
Slaughter also stressed that the State Generals General (AGS) differ fundamentally from federal regulators in terms of capacity and legal approaches.
State AG often lacks expertise, resources and time to build cases detailed similar to those pursued by federal agencies, but their actions can be more unpredictable.
The affairs brought by state courts operate according to different legal standards and procedures that the federal courts, increasing the probability of divergent legal precedents through the courts.
Lack of federal legislation
The current dispute at the level of the State highlights the structural challenges facing the cryptographic industry without complete federal legislation.
Slaughter warned that the delays in the longer congress establishing a unified regulatory framework, the most likely cryptographic companies will be faced with a patchwork of different rules and court decisions.
State courts are not required to comply with the decisions of the other, which can lead to inconsistent legal results across the country.
Slaughter noted that many state cases are entirely based on state law, deliberately structured to prevent the abolition of federal courts, as shown by the complaint of Oregon against Coinbase. This strategy makes it more difficult for cryptographic companies to consolidate defenses and request uniform treatment under federal law.
According to Slaughter, the persistence of implementing measures, whether led by the federal government or the State, demonstrates that the dispute alone will not resolve regulatory uncertainty. He underlined the urgent need for the congress to create legislative solutions for the digital asset sector because “This problem will not disappear or will not return to the bottle.
