Courts, Not Regulators, May Shape Crypto Law — But That’s Not Necessarily a Bad Thing
As the SEC retreats from its aggressive crypto enforcement posture under former Chair Gary Gensler, observers have speculated that courts will now become the primary venue for resolving disputes over how federal securities laws apply to digital assets. But despite the headlines suggesting a flood of new litigation, we at Anderson P.C. are not convinced that such a surge is inevitable—or even problematic.
There’s no question that the regulatory vacuum left by the SEC’s recent reversals has created legal uncertainty. In the absence of formal rulemaking or administrative enforcement, some market participants have pointed to class action lawsuits and investor-led litigation as the next frontier. While this shift may be framed as an alarming transition, it’s worth examining the dynamics more closely.
Litigation, particularly in complex securities cases, serves as an effective gatekeeping mechanism. Claims that lack merit are unlikely to be pursued when the cost of litigation is high and recovery is uncertain—especially when the claims are not brought on a contingency basis. And even where cases are filed on contingency, plaintiffs' counsel have every incentive to evaluate the legal foundation, factual support, and economic viability of the case before proceeding. In that way, private enforcement serves a filtering function grounded in both legal merit and economic rationality.
It is also worth noting that many of the most meritorious claims—cases involving clear fraud, misleading disclosures, or tokenized offerings that meet the Howey test—would likely have been brought regardless of who is leading the Commission. These are not novel legal questions; they are grounded in well-established law and basic investor protections. Whether those cases are pursued by public agencies or through private litigation is ultimately less important than whether the claims are credible, actionable, and deserving of judicial review.
The idea that courts stepping in automatically means more chaos is overstated. Courts offer a structured, precedent-based forum for resolving legal questions. Judicial opinions—unlike enforcement settlement orders—provide public reasoning, promote consistency, and can be appealed. That contributes to the clarity and stability the industry needs.
At Anderson P.C., we believe that regulatory restraint, paired with meaningful judicial oversight, can serve the market well. Not every dispute needs to be a federal enforcement action. And not every pivot in regulatory posture signals danger. Courts are not a fallback—they are a foundational part of our system. If they become the main venue for resolving crypto disputes in the short term, that may be a welcome reset.
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