SEC Official Defends Crypto Crackdown Amid Criticism from Industry
A top U.S. Securities and Exchange Commission (SEC) official on Friday rejected criticism of the regulator’s cryptocurrency crackdown and slammed the sector for violating securities laws. SEC enforcement director Gurbir Grewal spoke at a Rutgers University and Lowenstein Sandler LLP event in New York, addressing the agency’s heightened scrutiny of crypto firms in response to the industry’s failure to comply with regulations.
Regulatory Overreach Concerns
The SEC’s aggressive policing has sparked a wave of criticism from digital assets firms and advocates on Capitol Hill for what they describe as regulatory overreach. Grewal defended the agency’s approach, stating, “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.”
Unregistered Exchanges and Broker-Dealers
Initially, the SEC began targeting initial coin sales as unregistered securities offerings. However, it has increasingly focused on crypto firms acting as unregistered exchanges and broker-dealers. “Even if you came up with a bespoke rule set, you have an entire industry where the ethos is built around noncompliance,” Grewal said.
SEC Targets Binance and Coinbase
Last week, the SEC sued Binance and Coinbase, two of the world’s largest crypto exchanges, for allegedly breaking its rules. Coinbase has argued that the agency hardened its stance and became less willing to work with crypto firms following the FTX scandal in late 2022.