SEC Promises Further Enforcement Actions Against Non-Compliant Crypto Platforms
David Hirsch, the head of the SEC’s Crypto Assets And Cyber Unit, recently announced at the agency’s yearly Securities Enforcement Forum Central event that there will be more enforcement actions against crypto platforms that fail to comply with the SEC’s demands. The event took place in Chicago and was streamed online for those unable to attend.
DeFi Is Not A Workaround, Says Hirsch
Hirsch emphasized during the event that his team will continue to bring lawsuits against crypto platforms that do not meet the SEC’s requirements, even though success rates may vary. He also criticized DeFi platforms that may not be as decentralized as they claim.
“We’re going to continue to be active regarding brokers, dealers, exchanges, clearing agencies or any others who are active in this space, are within our jurisdiction and not meeting their obligations. […] 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.”
The SEC’s recent case against Ripple has affected public perception of the agency. However, it has also achieved victories in lesser-known cases.
Herculean Efforts
Addressing concerns about its backlog, Hirsch acknowledged that the SEC is already working at full capacity and lacks sufficient manpower to pursue every platform it wants to at present.
“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.”
However, by enforcing regulations on platforms that facilitate trading of these cryptocurrencies, many low-market-cap “shitcoins” and their issuing companies can be effectively neutralized.
Ultimately, the courts will determine if the SEC is overstepping its boundaries. Future cases can draw on legal precedents established in recent years as the agency increased its scrutiny of the crypto industry.
Hot Take: SEC’s Intensifying Enforcement Efforts Signal Continued Regulatory Pressure on Crypto Platforms
The head of the SEC’s Crypto Assets And Cyber Unit, David Hirsch, has announced that the agency will ramp up enforcement actions against non-compliant crypto platforms. This declaration comes despite uncertainties regarding success rates and criticism of DeFi platforms claiming to be decentralized. While the SEC’s case against Ripple has impacted public perception, the agency has achieved victories in lesser-known cases. Hirsch acknowledged the SEC’s limitations in pursuing every platform due to resource constraints but suggested that regulation enforcement on trading platforms could neutralize many low-market-cap cryptocurrencies. The courts will ultimately decide if the SEC’s actions exceed its jurisdiction, and future cases will build upon established legal precedents as the agency intensifies its scrutiny of the crypto space.
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