‘We’re not giving crypto a pass,’ says SEC’s enforcement chief

The Securities and Exchange Commission is going to continue to aggressively pursue enforcement actions against crypto companies, its lead enforcer told a legal conference in Washington on Sept. 9. 

“We’re not giving crypto a pass,” Gurbir Grewal, the director of the SEC’s division of enforcement, said at a forum hosted by the Practising Law Institute, a legal education nonprofit.

“We will continue to bring actions regardless of what technology is used,” Grewal continued, saying that “Non-enforcement of the most fundamental rules underlying our regulatory structure – that would be a betrayal of trust.”

The crypto industry has criticized the SEC as stifling innovation, which Grewal dismissed. His remarks come on the heels of a speech from SEC Chair Gary Gensler that similarly rejected the notion that the securities regulator had been unclear in its guidance.

Speaking to The Block, Grewal said of the SEC’s posture: “There’s not a question of how we do this analysis. That’s what you’re pushing back against: You might not like the answer, but this notion that there’s not clarity on the tests we apply, how we look at these issues.”

Following Grewal’s speech and a panel on the SEC’s enforcement, Commissioner Mark Uyeda took the stage to criticize, “regulation by enforcement” as inferior to the SEC’s process for rulemaking, specifically noting the concerns of crypto market participants. 

“Taken to an extreme, everything everywhere is securities fraud,” Uyeda said. “The commission should avoid issuing new interpretations through enforcement actions.”

In July, Grewal appeared before Congress, delivering much the same message that he did at today’s conference. Days later, the SEC launched its insider trading case against Coinbase employees, designating a roster of tokens as securities. 

Update 11:30 AM: Updated to include a conversation with Grewal following his speech. 

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