- According to Grewal, the crypto sector has long struggled with non-compliance.
- Grewal brought up the Howey Test, which is based on a Supreme Court decision from 1946.
Enforcement Chief of the U.S Securities and Exchange Commission (SEC), Gurbir Grewal, took aim at the cryptocurrency sector, highlighting their reluctance to comply with regulations and their desire to skirt them.
Grewal stressed the SEC’s dedication to adapting current securities rules to the evolving digital asset world while speaking at the Practicing Law Institute’s “SEC Speaks” event.
According to Grewal, the crypto sector has long struggled with non-compliance and has come up with creative ways to avoid the SEC’s authority. Claiming that the SEC’s explanations skew its consistent enforcement of securities laws, he addressed charges leveled against the agency for overreaching its regulatory jurisdiction and governing by enforcement.
Primary Emphasis on Safeguarding Investor Rights
Grewal brought up the Howey Test, which is based on a Supreme Court decision from 1946, as the main way to determine whether a cryptocurrency should be regulated as a security since it is an investment contract.
Moreover, this argument shows that the SEC is dedicated to protecting investors within the bounds of current legal precedents and counters claims made by the cryptocurrency sector that additional regulatory options should be considered.
At the same time, Grewal used his address to answer the crypto industry’s critics who had panned the SEC and its operations. According to experts, the regulatory agency is also under fire for allegedly stifling innovation and driving businesses to seek other countries with friendlier rules.
Nevertheless, Grewal brushed these accusations aside, seeing them as diversionary tactics from the more serious risks and issues plaguing the cryptocurrency sector, including potential fraud and a lack of transparency. He highlighted the agency’s enforcement actions taken to combat these risks, with a primary emphasis on safeguarding investor rights and market integrity.
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