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SEC will load more charges on crypto exchanges and DeFi, says enforcement chief

WASHINGTON, DC - SEPTEMBER 12: U.S. Securities and Exchange Commission chairman Gary Gensler testifies during a Senate Banking Committee hearing on Capitol Hill September 12, 2023 in Washington, DC. The hearing focused on oversight of the U.S. Securities and Exchange Commission. (Photo by Drew Angerer/Getty Images)

The U.S. Securities and Exchange Commission will expand its regulatory enforcement beyond Coinbase and Binance.US onto other cryptocurrency exchanges, intermediaries and decentralized finance (DeFi) entities, the agency’s head of crypto assets and cyber unit David Hirsch said Tuesday at a forum in Chicago.

See related article: U.S. SEC denied immediate access to Binance.US software

Fast facts

  • The SEC is currently investigating other companies that have allegedly conducted similar breaches as Coinbase and Binance.US, Hirsch said at the Securities Enforcement Forum Central in Chicago.
  • “We’re going to continue to bring those charges,” said Hirsch, adding that intermediaries such as brokers, dealers and clearing agencies that are not fulfilling their obligations will not escape the regulator’s reach.
  • The SEC sued Coinbase and Binance.US in June, based on accusations that the two major crypto platforms were offering unregistered securities, which deprived investors of protection against conflicts of interest and other risks.
  • The agency’s longstanding legal battle with Ripple Labs is also centered around the SEC’s claim that sales of XRP constituted the unregistered offering of investment contracts.
  • Hirsch further added that adding a “DeFi” label to an operation will not help circumvent the SEC’s enforcement.
  • In the agency’s enforcement action against the Stoner Cats non-fungible token (NFT) project, SEC enforcement director Gurbir Grewal said the “economic reality of the offering” determines an offering as a financial security, not its labels.

Source: Forkast

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