According to the agency’s director of enforcement, the US Securities and Exchange Commission (SEC) will not offer an apology to cryptocurrency companies that themselves report violations of securities laws.
Gurbir Grewal declared, “Our message to them is not, ‘register your product and we will disregard the billions you manage in this crypto lending product and violation of securities laws. With his first public statement on crypto since hiring in July last year, the Enforcement Director aims to set an example for companies that have consistently complained of a lack of compliance standards.
While offering some clarification, according to lawyers, the announcement dashed the hopes of even those in the industry who hoped the SEC would encourage self-reporting through an apology. While Grewal has taken it off the table, he has admitted that penalties can be reduced through cooperation.
“Our message is that if they come, we will look at their conduct in a more favorable manner – such as what measures, including penalties, will look like, and find a way to comply with securities laws,” Grewal said. “That’s what entities benefit from self-reporting violations and working with us.”
SEC is targeting crypto platforms
While many expected the regulatory agency to be more cooperative with Gary Gensler’s admission as chairman, after giving a course on blockchain technology at MIT, he has hardened his stance. They claim that many cryptocurrency products and platforms are governed by existing SEC regulations, and have focused more on targeting platforms providing access to digital assets rather than coin offerings.
Earlier this month, the SEC charged a BlockFi subsidiary for offering an interest-bearing account. However, it enabled the company to register a similar product with the SEC, which could potentially offer a road map for other companies with similar products. Last year, following a public dispute with the SEC, BlockFi competitor Coinbase Global Inc. was forced to abandon its efforts to launch a crypto-lending product.
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