In a panel co-hosted by the Lowenstein Sandler law firm and Rutgers Law School, Gurbir Grewal, the head of the U.S. Securities and Exchange Commission’s Enforcement Division, discussed the concept of regulation by enforcement and the SEC’s recent actions in the crypto industry.
It’s a catchy but tired refrain that’s used effectively by crypto market participants and lobbyists, Grewal said. He noted that the SEC is focused on activities within the sector, rather than the tokens themselves. We’re not concerned with the labels. We’re concerned with the offerings, the labels are not important to us, he said.
Grewal also spoke to the rise in recent enforcement actions within the crypto sector. I think what you’ve seen is that the crypto markets in the downturn, the increase in risk has forced us to focus our efforts here. Maybe that’s been perceived as an uptick, but I think it’s us just doing our jobs as we have been for the last few years, he said.
The SEC head also discussed the agency’s cooperation with other regulators. We will extend our jurisdiction as far as the law allows, Grewal said. We have tremendous cooperation with a lot of regulators. We meet with them frequently, we have MOUs [memoranda of understanding] with a lot of regulators that facilitate our ability to collect evidence abroad. And I think the more we do that, the more cooperation that exists among regulators, the less space that there is between us and the [U.K.’s] FCA and [Australia’s] ASIC and others that we work [with]… I think the less opportunity [there is] for regulatory arbitrage by bad actors.