SEC Director of Enforcement Delivers Remarks on Crypto Assets

In a speech, Securities and Exchange Commission’s (SEC) Division of Enforcement Director Gurbir Grewal delivered remarks on crypto assets in the context of the present-day securities laws. Director Grewal posited that securities laws, as currently drafted, cover crypto offerings. He noted “whether something is a security depends on the substance of the transaction – not its name, not its form, and not its underlying technology.” He highlighted the dangers of certain crypto offerings and stated the Commission has taken action to protect investors by charging issuers of failing to register initial coin offerings and other disclosure failures, as well as charging intermediaries for not registering with the SEC. Director Grewal noted that in the case of crypto, compliance is an extremely important consideration as many functions such as trade execution, clearing, and custody, occur under “one roof.” Director Grewal stated the Enforcement Division has built out a crypto playbook that includes “robust enforcement – moving our investigations with a sense of urgency and addressing emerging risks; robust remedies – seeking penalties and remedies at levels adequate to both hold bad actors accountable and deter misconduct; and robust compliance – working with market participants and gatekeepers to create a culture of compliance and cooperation to prevent misconduct.” He noted this playbook has guided the Division’s work against influencers and other predatory actors.

Click here to read SEC Director Grewal’s full remarks on crypto assets enforcement.