TheCorporateCounsel.net

The Financial Times recently reported that the SEC is likely to see an exodus of experienced lawyers over the next few months in anticipation of the Trump administration’s expected budget & headcount cuts across a range of federal agencies. According to a recent LegalDive.com article, some of the leading players in the crypto industry want to make sure their law firms know that they’ll pay a price if they hire any of the SEC lawyers involved in enforcement actions targeting crypto companies:

Crypto companies are threatening to wage a war of retribution against law firms if they hire lawyers from the outgoing Biden administration who played a role in trying to rein in their industry through enforcement actions.

The CEO of Coinbase and CLO of Ripple have used social media posts to take a critical look at lawyers leaving the Securities and Exchange Commission and other federal agencies that worked on lawsuits against their industry.

“We’ve let all the law firms we work with know, that if they hire anyone who committed these bad deeds in the (soon to be) prior administration, we will no longer be a client of theirs,” Brian Armstrong, CEO of Coinbase, the largest crypto exchange in the United States, said in a December 1 X post.

What a great idea!  Yes, an industry-wide vendetta against former regulators is definitely the best way to ensure the kind of good working relationship with current regulators that crypto leaders will need to achieve a comprehensive system of rules that the industry can live with. As undeniably brilliant as this cutting off your nose to spite your face strategy is, however, it looks like the crypto folks might be better served in the short term to worry about the SEC lawyers who are staying behind, instead of the ones who are leaving.

– John Jenkins