• US SEC head of Crypto Assets and Cyber Unit has warned of more charges coming to the crypto and DeFi spaces.
  • The SEC official, David Hirsch, says Coinbase and Binance are not the only industry players contravening the law.
  • Still, he acknowledged that some could go unchecked considering the commission is facing multiple lawsuits that are proving heavy.

US Securities and Exchange Commission (SEC) has been clamping down on the crypto industry, with Binance and Coinbase exchanges being in the front line of the attack.  

Based on recent assertions by the commission’s head of Crypto Assets and Cyber Unit, more charges could come, this time targeting other players as the agency acknowledges more lawbreakers remain at play.

SEC casts its net wider after Coinbase and Binance

Speaking during the Securities Enforcement Forum Central in Chicago on September 19, the commission’s head of Crypto Assets and Cyber Unit, David Hirsch, said that more crypto firms other than Coinbase and Binance are contravening the law, hinting at the possibility of more industry firms making headlines soon at the receiving end of the agency’s crackdown.

CoinDesk reports that Hirsch’s office is “aware of and investigating other firms involved in much the same activity” seen with Binance and Coinbase. Alluding that financial regulator had multiple businesses already on its radar, Hirsch said “… [The compliance breeches] hold true well beyond the two entities,” adding that the commission would keep on bringing the charges.

Nevertheless, it is impossible to overlook the possibility of the ongoing litigations getting the most of the SEC, with the official acknowledging that the agency already had “a lot of litigation going on,” and therefore at capacity, which potentially limits its reach.

SEC to target intermediaries failing to meet obligations

Hirsch also hinted at a possible crackdown against intermediaries like “brokers, dealers, exchanges, and clearing agencies violating the law by going against registration-related regulations or falling short in disclosures.

Committing to maintaining an active probe and doubling down on its involvement in DeFi, Hirsch articulated that decentralization will not deter the agency from executing its mandate.

Evaluating the SEC’s ability to win in its clampdown against the industry

The commission has been accused severally, with its targets filing lawsuits and petitions to the court to compel the agency to show restraint in executing its authority. Its regulation-by-enforcement approach has been called out multiple times already, with crypto enthusiasts pointing fingers at the agency for threatening the industry and driving businesses out of the US. 

Going up against giant firms, the fact that the SEC’s enforcement budget, coming from taxpayers’ money, is not as elastic as that of some of the firms it targets, sometimes its extent of impact can be limited.

Ripple lawyer John E. Deaton, a known SEC critic possibly because the agency has the XRP ecosystem as one of its targets, thinks the commission is going to lose the long game for the simple reason that their bone of contention is not founded in the law.

Mark my word, @SECEnfDirector along with @GaryGensler and this Crypto Chief, David Hirsch, are going to lose the long game because they don’t have the most important and necessary thing on their side: the law.

Btw, what happened to the SEC’s former Crypto Czar, Valerie… https://t.co/72Ur088sHs— John E Deaton (@JohnEDeaton1) September 19, 2023

On the other hand, what then happens when the SEC goes after smaller crypto exchanges that do not have the financial muscle to bring a good fight to court? While losing may be far-fetched, a settlement may be likely, which could bode well for the agency.

Leave a Reply

Your email address will not be published. Required fields are marked *

en_USEnglish