The U.S. Securities and Exchange Commission is coming for degens and crypto maxis. All of them.
A fairly ominous new press release made by the agency on May 3 indicates that the controversial agency has “double[d] …. the size of [its] … crypto assets and cyber unit.” That might sound really intimidating until you realize that means that they made 20 new hires.
Those folks might come with good intentions. SEC Chair Gary Gensler indicated in the press release that the move was designed to help “dedicate more resources to protecting” investors in the U.S. He added that “the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity.”
The press release goes on to flex on ICO scammers and aspirational criminals. They talk about the $2 billion in monetary relief they’ve pulled in from 80 enforcement actions since the unit was launched in 2017.
After they flex a little bit, they detail some of the things they’ll be investigating. It’s a short but meaningful list that includes crypto asset offerings, exchanges, lending and staking products, the entire world of DeFi and NFTs, and stablecoins. (The last constituent of the list probably made Elizabeth Warren smile.)
On the whole, this press release rubs many crypto investors and companies the wrong way for two reasons: 1) there’s very little legalese or regulatory guidance for crypto and 2) it feels adversarial in nature. While that might not be the agency’s purpose (they’re likely trying to go after cybercriminals using crypto as a medium of theft), the crypto industry has a complicated — and perhaps even well-earned — perception of the SEC because of its history with large crypto players.
In recent memory, the agency has sued Ripple Labs and threatened to sue Coinbase for reasons the company claims it doesn’t fully understand.
The regulator’s expansion also comes amid a bipartisan effort to wrestle away the agency’s jurisdiction over cryptocurrency and digital assets. If such a bill passed, the Commodity Futures Trading Commission would be the industry’s watchdog instead, which would be a win for the crypto industry.
At least at this stage in the game, the effort has yet to come before either house of Congress. In the meantime, SEC Chair Gary Gensler has made known his desire to share jurisdiction with the CFTC according to Coindesk.