Gurbir Grewal, the head of enforcement at the United States Securities and Exchange Commission (SEC), has defended the regulator against accusations of creating rules for the cryptocurrency industry as it goes along. Speaking at an SEC Speaks event on April 3, Grewal stated that crypto companies have attempted various methods to avoid the SEC’s jurisdiction and continue operating in the US. He also addressed concerns that the SEC was exceeding its authority or using enforcement lawsuits to regulate. Grewal cited the case of Sam Bankman-Fried, the former CEO of FTX, who was recently sentenced to 25 years in prison for defrauding investors. Grewal expressed his hope that the SEC can address the real issues in the industry that lead to increased investor risk, such as fraud and lack of transparency. He emphasized that the SEC’s standard for determining whether a security is a security or a commodity has been consistently applied. Grewal did not directly comment on reports that the SEC is considering classifying Ether as a security. In March, a judge in Utah sanctioned the SEC for acting in bad faith in a lawsuit against Debt Box. This has led some industry participants to suggest that there may be an exodus of cryptocurrency firms from the US due to the SEC’s inconsistent approach to enforcement. Grewal’s remarks followed criticism from SEC Commissioner Hester Peirce, who questioned the regulator’s accounting guidelines for institutions holding cryptocurrency assets.
SEC's enforcement director alleges the crypto sector employs 'innovative tactics' to evade regulations.