SEC Says Crypto Crackdown Is Far From Over, Warns DeFi Firms Won't Be Spared

SEC Says Crypto Crackdown Is Far From Over, Warns DeFi Firms Won’t Be Spared

Updated: 20 September 2023

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The Securities and Exchange Commission (SEC) said it’s far from done cracking down on the crypto industry and will expand its enforcement efforts beyond major exchanges such as Coinbase and Binance.US.

“We’re going to continue to bring those charges,” said David Hirsch, head of the SEC’s Crypto Assets and Cyber Unit, at the Securities Enforcement Forum Central in Chicago on Sept. 19 “We’re going to continue to conduct investigations, we’re gonna be active in the space, and adding the label of DeFi is not going to be something that’s going to deter us from continuing our work.”

He said the agency is investigating other firms involved in much the same activities as Coinbase and Binance.US and said compliance breaches in the industry “hold true well beyond any two entities.” The SEC has accused both Binance and Coinbase of selling unregistered securities in violation of securities laws

Brokers, dealers, exchanges, clearing agencies, or any other market players who are active in this space are within the SEC’s jurisdiction if they are not meeting their obligations, either through registration or failure to provide adequate or complete disclosures, Hirsch said.

Mark my word, @SECEnfDirector along with @GaryGensler and this Crypto Chief, David Hirsch, are going to lose the long game because they don’t have the most important and necessary thing on their side: the law.

Btw, what happened to the SEC’s former Crypto Czar, Valerie… https://t.co/72Ur088sHs

— John E Deaton (@JohnEDeaton1) September 19, 2023

Has SEC Reached Enforcement Capacity?

The SEC already has a lot of work on its plate and Hirsch acknowledged that there limits to how much it can do.

“There are more tokens extant — I think maybe 20,000, 25,000, last I read — than the SEC or any agency has the resources to pursue directly, and similarly there are a number of centralized platforms out there, some that are acting as unregistered exchanges.”

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