Gurbir Grewal, director of the United States Securities and Exchange Commission (SEC) division of enforcement, has reportedly said the entire crypto industry was “built around noncompliance,” leading to enforcement actions.
According to a June 16 Reuters report, Grewal spoke at an event hosted by law firm Lowenstein Sandler and Rutgers University Law School in New York, which also featured Coinbase chief policy officer Faryar Shirzad. The SEC enforcement director reportedly said the commission had worked “thoughtfully and incrementally” for actions related to the crypto space, but this approach had failed to address what the regulator considered unregistered securities offerings.
“Even if you came up with a bespoke rule set, you have an entire industry where the ethos is built around noncompliance,” said Grewal. “Typically, you’d also see compliance, but we’re not seeing that in this space, so we had to change strategies.”
The SEC and Coinbase — along with many other exchanges, including Binance — have been at odds since the commission issued a Wells notice to the crypto firm in March. Coinbase followed in May with a reply to its previously filed writ of mandamus in an effort to have the SEC provide clear rules of the road for digital assets. The SEC responded with its own lawsuit against the crypto exchange on June 6, naming several tokens as unregistered securities.
The outcome of the case could have far-reaching implications for crypto firms seeking to legally operate in the United States. Lawmakers on the House Financial Services Committee have scheduled a June 22 hearing to discuss oversight of the SEC.