Crypto Cos. Take SEC Cases To The Court Of Public Sentiment

May 17, 2024 – Media Mention

Partner and co-chair of Herrick's Securities Litigation and Enforcement GroupArthur G. Jakoby, spoke with Law360 about the cryptocurrency industry starting to publicize potential enforcement by the U.S. Securities and Exchange Commission ("SEC") to garner public support. 

The article noted that since April 2024, three firms dealing in digital assets have announced publicly that they received Wells Notices from the SEC. Arthur said the crypto industry appears to be "litigating through the press" early in the game in a way that was once unheard of.

"There have never been situations prior to now, where companies proudly wave the flag of getting Wells notices," he said.

The article highlighted that although this publicity may rally amicus briefs, it is unlikely to have any direct influence in the courtroom. Still, the strategy is more likely political than legal, said Arthur. As crypto companies lose hope that the SEC will change its tune on digital assets, many see Congress as their best path to clarity.

"Of course, their goal is to win lawsuits, but there's a greater goal, and the greater goal is to force a political solution, and that's why you're seeing conduct that by itself appears to be counterproductive," Arthur explained.

"These firms have concluded that they have something to gain by publicly poking the bear," Arthur noted.

Read the full article in Law360 here. Access may require a subscription.