• The head of the U.S. Securities and Exchange Commission’s Enforcement Division, Gurbir Grewal, spoke about the SEC’s recent actions during a panel Friday.
• He said that the SEC was focused on activities within the crypto sector, not labels or tokens themselves.
• Grewal also spoke to the rise in recent enforcement actions within the crypto sector, saying that it reflects increased risk rather than an uptick in enforcement efforts.
SEC Enforcement Director: ‘We’re Not Concerned With Labels’
Gurbir Grewal, head of the U.S. Securities and Exchange Commission’s Enforcement Division, spoke during a panel co-hosted by Lowenstein Sandler law firm and Rutgers Law School on Friday about recent SEC actions in relation to cryptocurrency cases. He said that the agency was focused on activities within the sector rather than token labels themselves and discussed why there has been an increase in enforcement actions recently.
Regulation by Enforcement
Grewal noted that “regulation by enforcement” is often used as a catchphrase by crypto market participants and lobbyists but clarified that what they were actually doing was enforcing existing rules and regulations already in place rather than creating new ones through their actions.
Focus on Activities Rather Than Labels
The regulator stated that when looking into crypto-related issues, they are more concerned with activities taking place rather than labels, emphasizing that they are looking for fraudulent offers disguised as legitimate decentralized finance (DeFi) products beneath the surface of seemingly legitimate operations.
Rise in Recent Crypto Enforcement Actions
In response to why there has been an increase in enforcement action within the crypto space lately, Grewal acknowledged that risk had increased due to market downturns which had forced them to focus their attention more closely on such matters; however he clarified this did not necessarily mean there had been an uptick in their efforts but rather simply indicated how seriously they were taking their job responsibilities concerning these cases now more than ever before.
Extending Jurisdiction Abroad
Lastly, he mentioned how they have memoranda of understanding (MOUs) with many different regulators which allow them to collect evidence from abroad when needed so they can extend their jurisdiction as far as legally permissible when relevant circumstances arise while working towards protecting investors and markets worldwide from fraudulence or other illicit dealings involving cryptocurrencies