‘We’re not giving crypto a pass’ on enforcement action, says SEC’s Gurbir Grewal
Gurbir Grewal, the enforcement director for the United States Securities and Exchange Commission, said the financial regulator will continue to investigate and bring enforcement actions against crypto firms, despite the narrative of “picking winners and losers” and “stifling innovation.”
In written remarks for a Friday program hosted by the Practising Law Institute, Grewal pushed back against criticism that the SEC “somehow unfairly targeted crypto” in its enforcement actions when compared with those against financial products or traditional markets. He also hinted that the SEC had a responsibility to many “non-White and lower-income investors” drawn to crypto projects, who may feel as though the financial system and its regulators “failed, or simply ignored, them.”
“It often seems critics are upset because we’re not giving crypto a pass from the application of well-established regulations and precedents,” said Grewal. “Were we not to investigate and bring appropriate cases just as we always have simply to duck criticism or difficult questions, we’d be acting with both fear and favor.”
The SEC enforcement director added:
“Non-enforcement of the most fundamental rules underlying our regulatory structure would be a betrayal of trust and not an option for us […] We will continue to bring actions regardless of what label is used or technology is involved (or not). Failure to do so would constitute an abdication of our responsibilities.”
Back at #SECSpeaks this morning. @SEC_Enforcement Director Grewal says the Division will not give #crypto a pass to duck public criticism. They will act, when appropriate, regardless of what label or technology is used. @PractLawInst @SEC_Enforcement #DigitalAssets pic.twitter.com/CBIVl0qj8F
— Kurt Wolfe (@Enforce_Update) September 9, 2022
Officials appointed Grewal as the SEC’s enforcement chief in July. Representative Brad Sherman later criticized the regulatory body, saying before the House Financial Services Committee that Grewal needed to show “fortitude and courage” by going after major crypto exchanges in his role as enforcement director and not “small fish.” The SEC subsequently filed a complaint against a former Coinbase employee, labeling nine tokens as “crypto asset securities” in a seeming effort to regulate digital assets through enforcement actions.
Related: Cleaning up crypto: How much enforcement is too much?
SEC chair Gary Gensler spoke at the same Practising Law Institute event on Thursday, suggesting that he welcomed legislation aimed at expanding the authority of the Commodity Futures Trading Commission, provided it didn’t “inadvertently undermine securities laws.”