(Kitco News) - The Securities and Exchange Commission sought to reinforce its stance on cryptocurrency regulation on Friday by sending out Gurbir Grewal, the agency’s enforcement director, to deliver the following message to cryptocurrency investors – “We're not giving crypto a pass.”
Grewal made the comment while speaking at a forum hosted by the Practising Law Institute, a legal education nonprofit, and stressed that the financial regulator intends to continue to investigate crypto firms despite the SEC’s reputation for “picking winners and losers” and “stifling innovation” in the crypto asset space.
The enforcement director directly addressed those who feel that the agency should give crypto “a pass from the application of well-established regulations and precedents,” emphasizing that the SEC has been given the important job of remaining neutral and applying the same regulatory practices regardless of the industry.
“Were we not to investigate and bring appropriate cases just as we always have simply to duck criticism or difficult questions, we’d be acting with both fear and favor. We’ve been given a hard, but important job: to impartially enforce the laws and rules on the books for the benefit of investors and our markets,” Grewal said. “Non-enforcement of the most fundamental rules underlying our regulatory structure would be a betrayal of trust and not an option for us.”
Moving forward, Grewal indicated that the SEC will not be deterred in its mission to regulate the cryptocurrency industry or any other industry where regulation is required in order to protect investors in the market.
“We will continue to bring actions regardless of what label is used or technology is involved (or not). Failure to do so would constitute an abdication of our responsibilities, and an abandonment of the investors who have been harmed in those markets, including through being denied essential disclosures and protections.”
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Grewal’s remarks were followed by comments from SEC Commissioner Mark Uyeda, who took the stage after a panel on SEC enforcement to address the notion of “regulation by enforcement,” which Uyeda sees as inferior to the SEC’s process for rulemaking.
“Taken to an extreme, everything everywhere is securities fraud,” Uyeda said. “The commission should avoid issuing new interpretations through enforcement actions.”
These comments come the day after SEC chair Gary Gensler spoke at the same conference and suggested that he supports the idea of Congress giving more power to the Commodity Futures Trading Commission (CFTC) to regulate cryptocurrencies, specifically Bitcoin (BTC) and Ethereum (ETH), "as long as it doesn't take away power from the SEC" or “inadvertently undermine securities laws.”
