SEC Revives 35-Year Bilzerian Injunction to Silence Crypto Critics

SEC Revives 35-Year Bilzerian Injunction to Silence Crypto Critics

A federal judge just dusted off a 2001 court order originally aimed at a notorious 1980s corporate raider and used it to block him from publicly criticizing the SEC’s handling of crypto. The ruling matters because it shows how decades-old securities judgments can still muzzle speech about digital assets and potentially chill industry debate.

The case began when Paul Bilzerian, convicted in 1989 for securities fraud, asked the court to modify a permanent injunction that barred him from “commencing or causing the commencement of any legal proceedings” without prior approval. Bilzerian argued the order was overbroad and violated his First Amendment rights, especially as he sought to comment on SEC enforcement actions involving cryptocurrency tokens. The SEC countered that Bilzerian’s proposed lawsuits and public statements were simply attempts to relitigate his long-settled fraud liability and harass the agency. District Judge Royce Lamberth refused to lift or narrow the injunction, holding that Bilzerian had not shown a “significant change in factual or legal circumstances” sufficient to justify modification under Rule 60(b).

Bilzerian loses; the SEC keeps a powerful procedural weapon. The agency can now cite this precedent to argue that individuals under old securities judgments must seek court permission before launching crypto-related litigation or even public campaigns that might “cause” such litigation. Market participants who cheered Bilzerian’s anti-SEC rhetoric now see that speech tied to enforcement fights can be chilled by decades-old decrees.

In plain English, the court decided that a 23-year-old gag order still applies even when the topic shifts from 1980s penny stocks to Bitcoin ETFs. The legal standard remains unchanged: anyone subject to such an injunction must prove the world has materially changed before a judge will loosen the restrictions. Until then, the SEC retains the ability to demand pre-approval of lawsuits or public statements that might trigger litigation.

For crypto, the ruling underscores that the SEC can weaponize legacy judgments to limit critical voices, raising stakes around decentralization versus regulatory power. Exchanges and DeFi protocols already wary of enforcement should consider whether vocal founders or token promoters under past orders could face similar speech restrictions. Traders and analysts may self-censor commentary on SEC policy, fearing that public statements could be portrayed as “causing” unauthorized litigation.

Old judgments cast long shadows; anyone eyeing crypto litigation should assume the SEC will test every procedural lever before the merits are reached.