Reported by: SEBASTIAN SINCLAIR&DAVID CANELLIS

The US Securities and Exchange Commission (SEC) has long been a thorn in the side of the crypto ecosystem — and chairman Gary Gensler represents the very tip.

Gensler’s SEC has been more prolific in its crypto cases this year. In January, Gensler directed staff to figure out how to get “these platforms inside the investor protection remit,” amid emerging hints of probes into crypto lending products offered by Celsius, Voyager and Gemini.

One month later, the agency fined crypto lender BlockFi $100 million for failing to register its own retail crypto lending product as a security. The case marks the first of its kind against crypto lenders, fulfilling in part Gensler’s intent outlined in his letter to Warren. 

Gensler again pushed the idea of greater crypto exchange oversight in Apr. 2022. He raised compelling trading platforms to register with the regulator while requiring segregation of asset custody to minimize risk of losses.

“There’s no reason to treat the crypto market differently just because different technology is used,” Gensler said at the Penn Law Capital Markets Association’s annual conference at the time. “These crypto platforms play roles similar to those of traditional regulated exchanges. Thus, investors should be protected in the same way.”

Of the 1,300 people working at the agency, roughly 30 were dedicated full-time to crypto enforcement. The SEC in May pledged to bolster its crypto headcount to 50, while Gensler criticized crypto exchanges for offering multiple services — custody, trading and market making — which is frowned upon in traditional markets.

Read full report: https://blockworks.co/news/sec-under-gensler-crypto-power-grab-effective-protection