As the Securities and Exchange Commission continues to investigate the crypto business, Gurbir Grewal, the agency’s director of enforcement, says the regulator is not worried about labels or technology but rather if securities are being marketed in a manner that complies with current rules.
Grewal stated in an interview that the SEC is “concerned with the offerings” in the cryptocurrency markets.
When they peek behind the hood and kick the tires, they have discovered a tone of DeFi goods and solutions that are neither decentralized nor financial but rather are just outright fraud, according to Grewal. Stablecoins that are neither coins nor stable, have been widely used, but are fake.
The director of enforcement also called attention to the fact that protocols and smart contracts, two types of crypto products and services that are supposed to guard against market manipulation and fraud, haven’t done so. It doesn’t matter what you label it—you can call it crypto. What you’re offering’s substance and reality are what matter. We’ll hold you accountable, he added, if that offering needs to be registered but you’re not doing it.
The two biggest cryptocurrency exchanges, Binance and Coinbase, were accused by the SEC earlier this month of breaking the securities laws in two back-to-back cases.
Grewal stated that the reason the agency brought charges in relation to the exchanges was because it was important to bring cases that would have the greatest impact and serve to discourage future wrongdoers while also fostering compliance.
More generally, he believes that there are too many risks associated with the cryptocurrency market because it is currently experiencing a sharp downturn and investors are suffering as a result.
More generally, he believes that there are too many risks associated with the cryptocurrency market because it is currently experiencing a sharp downturn and investors are suffering as a result.
Grewal disagrees with the phrase “regulation by enforcement,” which has been used frequently in the cryptocurrency business to describe the measures. The refrain is catchy but worn out. Enforcing current laws and rules is what they are doing.
In the web3 industry, several businesses disagree.
