The Securities and Exchange Commission (SEC) is not easing off its pursuit of cryptocurrency exchanges and decentralized finance (DeFi) projects that it believes are flouting securities regulations. David Hirsch, the head of the agency’s Crypto Assets and Cyber Unit, is gearing up for a wave of enforcement actions against cryptocurrency exchanges and decentralized finance (DeFi) projects.
According to a latest report, Hirsch suggested that the SEC is not done pursuing legal actions against entities it perceives as violating securities laws in the cryptocurrency space, akin to its previous actions against Coinbase Inc. (COIN) and Binance.
During a speech at the Securities Enforcement Forum Central in Chicago, Hirsch revealed that the SEC’s enforcement office has been diligently investigating firms engaged in activities reminiscent of the major platforms, Coinbase and Binance.
He emphasized that the agency’s commitment to ensuring compliance within the cryptocurrency industry extends beyond well-known exchanges.
“We’re going to continue to be active as to intermediaries,” Hirsch asserted. This category encompasses brokers, dealers, exchanges, clearing agencies, and any others operating within the jurisdiction of the SEC that fail to fulfill their obligations, whether through non-registration or inadequate disclosures.
Moreover, Hirsch clarified that DeFi projects would not escape the SEC’s scrutiny. He affirmed the agency’s intention to conduct thorough investigations and maintain an active presence in the DeFi space, dismissing the notion that labeling a project as “DeFi” would deter regulatory actions.
Crypto Vs. Traditional Enforcement
Traditionally, the SEC has employed a more restrained approach to enforcement, often targeting violations at well-established, regulated businesses that are amenable to negotiating settlements.
However, digital asset companies typically resist such settlements due to the existential threats posed by regulatory actions, leading them to contest charges in court.
Hirsch acknowledged the challenges posed by the sheer number of tokens and platforms in the crypto space, surpassing the SEC’s resource capabilities. “There are more tokens extant… than the SEC or any agency has the resources to pursue directly,” he admitted.
Despite these resource limitations, Hirsch’s remarks signal the SEC’s determination to continue pursuing legal actions against crypto-related entities, focusing on compliance and enforcement in an ever-evolving and expanding sector.
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