According to a recent revelation, the United States Securities and Exchange Commission (SEC) is planning to ramp up its crypto-enforcement plans. The regulator might increase the size of its digital assets enforcement squad in the coming days to take its recent surge of cases targeting crypto firms a level higher.
An SEC spokesperson briefed the media that the addition nearly doubled the size of the 50-person operation and that the added slots “are nearly filled.” Now the agency is “planning to add additional staff” to that unit, highlighting the fact that digital assets enforcement priority has become a priority for the SEC. However, the spokesperson didn’t disclose the count of new positions to be added.
Under the leadership of Gary Gensler, the chairman of SEC, the regulator has consistently hammered away at the crypto sector. In May last year, the regulator sent a loud message to the industry participants by adding 20 individuals to its newly named Crypto Assets and Cyber Unit despite opposition from its members.
Notably, the SEC has maintained a steady stream of crypto cases over the past couple of years. However, recent weeks saw a spate of enforcement actions and accusations that could form the basis of a kind of shadow rule for digital assets in the absence of the formal cryptocurrency policy the industry has been asking for.
Recently, the SEC has built several cases on the claims that most digital tokens are unregistered securities, such as FTX’s exchange token FTT and the yield products at a number of firms. It also recently accused Kraken of inappropriately offering securities in the form of its staking service.
The SEC-Paxos feud over the third largest stablecoin BUSD was all over the crypto industry in the past month. The SEC issued a “Wells Notice” to Paxos accusing it of selling unregistered security targeting BUSD. The firm publicly acknowledged the notice but categorically disagreed and said that it is in talks with the regulator.
According to a report from a consulting firm Cornerstone Research, the SEC brought a record number of crypto-related enforcement actions last year. As per data, figures from 2022 have been about 50% up from 2021.
In an interview, Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said that crypto companies would not survive unless they comply with free and fair disclosure rules. Gensler said that “the runway is getting awfully short” for crypto firms that continue to evade full disclosure performed by major tech companies like Apple.
However, the SEC’s approach of targeting crypto firms has been criticized by many. Many crypto lawyers fear that the agency will finally make an aggressive case against the major trading platforms that they’re running illegal, unregistered exchanges and need to stop.
The SEC’s enforcement-oriented approach has also been criticized by Hester Peirce, Commissioner of the Securities and Exchange Commission (SEC). In a tweet, Pierce pointed out that Congress was “actively considering the issue” regarding stablecoins and added that the SEC and other financial regulators could hold public roundtables pending results from the legislators. However, the regulators can’t draft rules using enforcement actions.