Reported by LEO SCHWARTZ

On Friday, Gurbir Grewal, the SEC’s director of enforcement, pushed back against criticism from industry participants that his agency is engaging in “regulation by enforcement,” arguing that crypto represents a “perfect storm of investor risk” that needs to be addressed through existing securities law. null

At an event in Midtown Manhattan hosted by law firm Lowenstein Sandler and Rutgers Law, he told two law professors that the SEC’s frenzied activity was spurred by the crypto industry’s promises of financial inclusion and wealth generation coupled with “wholesale noncompliance,” a lack of meaningful disclosures, and widespread fraud.

Although Grewal’s enforcement division has a staff of around 1,300 that annually compiles more than 700 recommendations for action, he cautioned that it “can’t be everywhere at once.” Since the collapse of FTX, the SEC has brought highly publicized enforcement actions against everyone from Kim Kardashian to Paul Pierce to failed projects like Terraform Labs.

Barring the passage of new crypto regulation by Congress, the SEC relies on existing securities law, which Chair Gary Gensler has argued is sufficient to oversee the industry. Even so, the agency has expanded its view of cryptocurrencies that it deems securities—an approach participants say prevents them from operating compliantly.

Read full report: https://fortune.com/crypto/2023/06/16/sec-enforcement-regulation-crypto-grewal/amp/