The SEC enforcement chief stated that the agency’s interest in crypto goes much beyond the high-profile cases with a number of DeFi businesses on its radar.
The US Securities and Exchange Commission (SEC) seems to be further determined to chase down crypto exchanges and DeFi firms. David Hirsch, head of the SEC’s Crypto Assets and Cyber Unit, said that the agency found most firms violating the securities laws.
SEC vs. DeFi and Exchanges
His enforcement office, which has been aggressively pursuing cases for the SEC, is aware of and actively investigating other companies engaged in similar activities. Hirsch made it clear that the industry’s compliance breaches extend far beyond just these two entities. He delivered this message on Tuesday during the Securities Enforcement Forum Central held in Chicago. “We’re going to continue to bring those charges,” he added.
Additionally, Hirsch stated that the agency has a number of businesses on its radar operating in a similar way to Binance and Coinbase. The SEC enforcement chief stated that the agency’s interest in crypto goes much beyond the high-profile cases. Hirsch added:
“We’re going to continue to be active as to intermediaries. That can be brokers, dealers, exchanges, clearing agencies or any others who are active in this space, are within our jurisdiction and not meeting their obligations, either through registration or failure to provide adequate or complete disclosures.”
He also took a dig at the DeFi projects adding that they won’t escape the enforcement division’s attention. “We’re going to continue to conduct investigations, we’re gonna be active in the space, and adding the label of DeFi is not going to be something that’s going to deter us from continuing our work,” he said.
SEC – Regulation Through Enforcement
The US SEC has largely adopted the stand of regulation through enforcement and has received major criticism from the crypto community for this. In the past, the US securities regulator typically followed a more measured enforcement approach, focusing on misconduct within regulated businesses.
These often included large Wall Street firms with robust legal teams that would promptly initiate settlement negotiations. However, when dealing with digital asset companies, the charges brought against them often pose existential threats, leading them to contest the SEC in court.
The SEC operates with a finite enforcement budget, which is often smaller than the financial behemoths it is accustomed to dealing with. Consequently, its capacity for handling cases remains constrained. “We do have a lot of litigation going on,” added Hirsch.