SEC Enforcement Chief Rejects Criticism of Crypto Crackdown – During a recent event at Rutgers University and Lowenstein Sandler LLP in New York, Gurbir Grewal, the enforcement director of the U.S. Securities and Exchange Commission (SEC), dismissed criticisms of the regulator’s actions against cryptocurrencies and strongly criticized the sector for its violations of securities laws.
Grewal emphasized that the increased scrutiny of crypto firms by the SEC is a direct result of their failure to adhere to the agency’s regulations. The regulatory actions taken by the agency have faced significant backlash from digital asset firms and advocates on Capitol Hill, who argue that they amount to excessive regulation and have expressed their criticisms regarding the agency’s aggressive enforcement approach.
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“We have worked thoughtfully and incrementally in this space,” Grewal said on Friday. “Typically you’d also see compliance but we’re not seeing that in this space, so we had to change strategies.” Initially, the SEC directed its attention towards unregistered securities offerings in the form of initial coin sales, but it has since shifted its focus towards crypto firms that operate as unregistered exchanges and broker-dealers.
In response, the crypto sector has voiced its concerns, stating that current U.S. regulations are insufficient and advocating for the implementation of new rules. However, Gurbir Grewal raised doubts on Friday about the effectiveness of such proposed regulations in curbing misconduct. “Even if you came up with a bespoke rule set, you have an entire industry where the ethos is built around noncompliance,” he said.
In a recent development, the U.S. Securities and Exchange Commission (SEC) filed lawsuits against Binance and Coinbase, two prominent global cryptocurrency exchanges, accusing them of violating the agency’s regulations. These actions by the SEC mark the continuation of a growing crackdown on the crypto industry, which has intensified during the tenure of the Democratic leadership.
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Binance and Coinbase have both refuted the allegations and criticized the SEC for allegedly withdrawing from cooperative efforts to reach a resolution. According to Coinbase, the agency adopted a more rigid stance and displayed reduced willingness to collaborate with crypto firms following the FTX scandal that unfolded in late 2022.