US SEC Enforcement Director Gurbir Comments on Crypto Crackdown

A senior US Securities and Exchange Commission (SEC) official on Friday (June 16, 2023) rejected the recent criticism of the regulatory authority’s crypto-related crackdown and also slammed the industry for violating applicable securities laws.

As first reported by Reuters, the regulator’s increased scrutiny of cryptocurrency companies has come as a response to the sector’s failure to adhere to the agency’s regulations, SEC enforcement director Gurbir Grewal stated at a Rutgers University and Lowenstein Sandler LLP event that took place in New York.

The agency’s recent policing has led to a strong wave of criticism from crypto-focused companies and supporters on Capitol Hill for what they think is a regulatory overreach.

Grewal stated:

“We have worked thoughtfully and incrementally in this space. Typically you’d also see compliance but we’re not seeing that in this space, so we had to change strategies.”

The SEC had started going after initial coin sales as unregistered securities offerings, however, it has focused more on crypto-related businesses serving as unregistered exchanges and broker-dealers.

The nascent crypto industry has noted that the current US regulations are not adequate and called for updated rules. This past Friday, Grewal had questioned if these updated rules could work to address misconduct.

He added:

“Even if you came up with a bespoke rule set, you have an entire industry where the ethos is built around noncompliance.”

The SEC this past week had sued Binance and Coinbase, which are two of the biggest cryptocurrency exchanges, for violating its rules. The SEC’s latest actions are now part of a broader crypto-focused crackdown that has picked up its pace under Democratic leadership.

Binance and Coinbase have consistently rejected the wide range of allegations and have claimed that the SEC has been walking away from the companies’ ongoing efforts to cooperate and arrive at a reasonable resolution.

Coinbase has stated that the regulator hardened its stance and became a lot less willing to work with crypto-focused companies following the FTX scandal.


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