US SEC Plans to Keep Growing Crypto Unit as Enforcement Ramps Up
The U.S. Securities and Exchange Commission (SEC) may ramp up its recent surge of cases targeting crypto firms by once again boosting the size of its digital assets enforcement squad.
The regulator, which has been hammering away at the crypto sector under the direction of Chair Gary Gensler, sent a loud message to the industry in May 2022 by announcing it was adding 20 people to its newly named Crypto Assets and Cyber Unit. That nearly doubled the size of the 50-person operation, and an SEC spokesperson told CoinDesk that the added slots “are nearly filled.”
Now the agency is “planning to add additional staff” to that unit, the spokesperson said Wednesday, further underlining the priority that digital assets enforcement has become for the SEC. The spokesperson didn’t disclose how many new positions would be added.
The regulator has maintained a steady stream of crypto cases over the past couple of years, but recent weeks saw a spate of enforcement actions and accusations that could form the basis of a kind of shadow rule for digital assets in the absence of formal cryptocurrency policy the industry has been asking for. Many of the cases are building on SEC claims that most digital tokens are unregistered securities, such as FTX’s exchange token, FTT, and the yield products at a number of firms. It also recently accused Kraken of inappropriately offering securities in the form of its staking service.
The regulator accused Terraform Labs and co-founder Do Kwon last month of deliberately misleading investors about the strength of the doomed TerraUSD stablecoin and – again – selling unregistered securities.
But many crypto lawyers’ biggest SEC fear is that the agency will finally make an aggressive case against the major trading platforms that they’re running illegal, unregistered exchanges and need to stop.
“Come into compliance,” Gensler said during a discussion last month with reporters about the crypto industry. “Provide the time-tested disclosures and protections to their investors. It's not really a choice; that's the law.”
Read More: Will the SEC Convince a Court It’s Right to Label These Tokens as Securities?