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The legal world is nothing if not civil, with lawyers engaged in bitter disputes still referring to each other as “my friends” or adding a passive-aggressive “respectfully” at the end of a piercing argument. Still, I hoped some sparks would fly last night at a Columbia Business School event, where Ladan Stewart—the recently departed SEC crypto litigation unit chief, who led the agency’s Coinbase lawsuit—spoke on a panel alongside outspoken blockchain lawyers including Polygon’s Rebecca Rettig.

Stewart left the SEC shortly after lawyers sparred over whether the agency’s lawsuit against Coinbase should be dismissed in front of Southern District of New York Judge Katherine Failla in January—an argument the agency handily won in a decision earlier this month. As is tradition, Stewart strolled through the revolving door, joining the global law firm White & Case to develop a crypto and cyber defense practice, telling Bloomberg that “crypto is here to stay.”

While she may have joined her colleagues on the other side of the court, Stewart still represented the SEC on the panel last night, at least in spirit. And though she was limited in talking about the specifics of key cases she worked on, including the recent Wells Notice issued to decentralized exchange Uniswap, Stewart still opined on her former agency’s controversial approach to the blockchain sector.

Speaking about the Coinbase case, Stewart confirmed the industry’s worst fears that Failla’s recent ruling would embolden Chair Gary Gensler and agency lawyers. “It’s probably going to give the SEC that sort of comfort it needs to proceed as it has been,” she said. “It’s not going to back off of bringing regulatory cases in the crypto space.”

Stewart also added her take on the debate around clarity and whether the SEC is engaged in a campaign of regulation by enforcement, echoing Gensler’s long-stated position that the existing laws are sufficient. She did concede that one of the lawsuits brought against companies like Ripple and Coinbase will likely make its way to the Supreme Court, with the key issue of what constitutes a security still unsettled. “Then there will be some definitive sort of clarity on that question,” Stewart said.

The evening was largely restrained, with Rettig pushing back on Stewart’s assertion that Uniswap was the first SEC lawsuit against a DeFi company (Rettig said it was EtherDelta back in 2018), and DLx Law cofounder Lewis Cohen politely arguing that Failla had applied securities law incorrectly in her recent Coinbase decision.

The panel did come to a head as the speakers discussed a fundamental question in crypto litigation—are the tokens themselves securities, or is it the sale that creates an investment contract? Stewart quickly clarified that the SEC’s position has been, at least for the past few years, that the underlying asset is not a security, but instead its offer and sale.

Rettig pounced. “But then what do you register?” she asked. “If the industry wants to come into compliance, what gets registered?”

“I think that’s beyond my area of enforcement,” Stewart responded to laughter, but Rettig asked again.

Stewart answered that the token, plus “all the stuff around the token,” is the security. “You can’t obviously register all the stuff, but you can register the token.”

“But we agreed that’s not the security, and that’s not the investment contract, either,” Rettig parried. “This is, I think, where the industry and the SEC have this divide, which is tell us what to do, and it’s hard to know.”

Cohen jumped in. “It’s impossible, it’s not hard.”

Before the panel could verge on anything resembling hostility, the host, Columbia Business School adjunct Omid Malekan, added that he was grateful for the panelists debating such complicated questions.

“Absolutely,” replied Stewart. “We’re all friends.”

Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz

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