John Reed Stark criticizes regulatory reform during SEC crypto roundtable

The U.S. Securities and Exchange Commission hosted its inaugural crypto roundtable on March 21, bringing together industry attorneys, officials, and former regulators.

John Reed Stark, former director of the SEC's Office of Internet Enforcement, opposed regulatory changes for digital assets at the agency’s first crypto roundtable. He argued that the Securities Acts of 1933 and 1934 should remain unchanged and that digital assets still fall under the existing definition of securities.

The first-ever SEC crypto roundtable. Source: SEC

Stark emphasized that cryptocurrency buyers are primarily investors rather than collectors, reinforcing the SEC's role in investor protection. He noted that the rapid development of case law in the crypto space resulted from firms attempting to delay regulatory actions by hiring top law firms to challenge the SEC with strong legal arguments.

Stark stated that he had reviewed every legal case involving crypto firms and argued that they had lost nearly every time. He concluded by expressing skepticism about digital assets, asserting that they lack the transformative innovation seen in past technological breakthroughs like the launch of the iPhone.

John Reed Stark, pictured far right, arguing against comprehensive regulatory reform. Source: SEC

John Reed Stark has been one of the most outspoken critics of the cryptocurrency industry, frequently condemning its lack of transparency and regulatory compliance.

In February 2024, he compared a sponsorship deal between the Dallas Mavericks and crypto firm Voyager to an agreement with a "heroin manufacturing firm." Stark has also defended the SEC’s enforcement-based regulatory approach under former chairman Gary Gensler, arguing that digital assets should comply with existing laws rather than expecting legal adaptations to accommodate them.

His strong anti-crypto stance has drawn criticism from industry leaders and investors. In June 2023, billionaire investor Mark Cuban dismissed Stark’s views, referring to them as "crypto derangement syndrome."