Former SEC Official Stands Firm Against Tailoring Securities Laws for Digital Assets
At the United States Securities and Exchange Commission’s (SEC) first crypto-focused roundtable held on March 21, former SEC official John Reed Stark strongly opposed calls for regulatory reform aimed at accommodating digital assets.
Stark, who previously served as the director of the SEC’s Office of Internet Enforcement, asserted that the Securities Acts of 1933 and 1934 remain fully applicable and should not be modified to make room for the growing cryptocurrency sector.
“People buying crypto are not collectors. We all know they are investors,” Stark stated. “The SEC’s mission is to protect investors, and that mission doesn’t change just because the asset is digital.”
He went on to criticize what he described as a deliberate strategy by crypto firms to delay enforcement through extensive legal maneuvering.
“The volume of case law has expanded rapidly because of crypto firms that pursued a delay-tactic strategy,” he said. “They hired the top law firms, filed impressive briefs—and in my view, they lost nearly every single time.”
Stark concluded by saying that, in his opinion, digital assets lack the kind of transformative innovation seen in previous technological revolutions, citing the launch of the iPhone as a benchmark for true innovation.
Stark’s Longstanding Anti-Crypto Position
John Reed Stark has emerged as one of the most vocal and consistent critics of the crypto industry. He has repeatedly criticized what he sees as a lack of transparency, weak compliance standards, and regulatory evasion tactics across the digital asset space.
In February 2024, he drew attention when he likened the sponsorship deal between the NBA’s Dallas Mavericks and failed crypto lender Voyager to a partnership with a “heroin manufacturing firm.”
Stark has been a vocal supporter of the SEC’s aggressive enforcement approach under former Chairman Gary Gensler, arguing that crypto firms should comply with existing financial regulations, rather than seeking to rewrite them in their favor.
“Cryptocurrency must conform to the law. The law should not be reshaped to fit cryptocurrency,” Stark has previously argued.
Industry Pushback and Public Debate
Stark’s hardline stance has sparked backlash within the crypto industry, where critics argue that such views stifle innovation and ignore the evolving nature of finance.
In June 2023, prominent entrepreneur and investor Mark Cuban dismissed Stark’s criticisms as “crypto derangement syndrome,” accusing the former regulator of holding unreasonably extreme views on digital assets.
As the crypto industry continues to mature and pressure mounts for regulatory clarity and modernization, the division between traditional regulators and crypto innovators is becoming increasingly pronounced.
While the SEC roundtable was aimed at facilitating open dialogue between industry leaders, attorneys, and regulators, Stark’s remarks highlighted the deep divide that still exists regarding how — or if — digital assets should be regulated differently from traditional securities.
What’s Next for Crypto Regulation in the U.S.?
The SEC roundtable marks a pivotal moment in the ongoing debate over crypto regulation in the United States. As policymakers weigh calls for modernization against the need for investor protection, voices like Stark’s will continue to influence how regulators interpret and enforce existing laws.
The question now is whether regulators will maintain the current path — one rooted in enforcement and precedent — or begin adapting frameworks to reflect the unique characteristics of digital assets. For now, with figures like Stark leading the opposition, regulatory reform may still face strong institutional resistance.
