SEC chief enforcement officer dismisses criticism of crypto crackdown

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A senior U.S. Securities and Exchange Commission (SEC) official on Friday dismissed criticism of the regulator’s crackdown on cryptocurrency and slammed the industry for violating securities laws. The regulator’s increased scrutiny of crypto firms comes in response to the industry’s failure to comply with agency regulations, SEC Chief Enforcement Officer Gurbir Grewal said at an event. Rutgers University and Lowenstein Sandler LLP in New York. The agency’s aggressive policing has sparked a wave of criticism from digital asset firms and Capitol Hill advocates for what they describe as regulatory overreach. “We have thoughtfully and incrementally worked in this space,” Grewal said on Friday. “Typically you would also see compliance, but we don’t see that in this space, so we had to change our strategy.” The SEC began targeting initial coin sales as unregistered securities offerings, but increasingly focused on crypto companies acting as unregistered exchanges and brokers. The crypto industry has said existing US regulations are inadequate and called for new rules. On Friday, Grewal wondered if these new rules would reduce fouls. “Even if you come up with a bespoke set of rules, you have an entire industry where the ethos is built around non-compliance,” he said. Last week, the SEC sued Binance and Coinbase, two of the world’s largest crypto exchanges, for allegedly breaking its rules. The SEC actions were the latest in a crypto crackdown that has accelerated under Democratic leadership. Binance and Coinbase both denied the allegations and accused the SEC of backing away from the companies’ efforts to cooperate and reach a resolution. Coinbase said the agency had hardened its stance and become less willing to work with crypto firms following the FTX scandal in late 2022.

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