tl;dr
The chief of the SEC's new crypto task force, Hester Peirce, suggested that the agency's former chair, Gary Gensler, was to blame for the proliferation of fraud in the crypto industry due to the agency's enforcement-focused approach without creating industry-specific rules. Peirce argued that this a...
SEC Commissioner Hester Peirce criticized former chair Gary Gensler's anti-crypto policies for fueling fraud in the industry. Peirce and colleagues dismiss Gensler's crypto caseload, signaling a fresh start for SEC's assessment of crypto companies' compliance. While SEC reevaluation may benefit crypto industry, token issuers still likely to face scrutiny from the regulator.
The chief of the SEC's new crypto task force, Hester Peirce, suggested that the agency's former chair, Gary Gensler, was to blame for the proliferation of fraud in the crypto industry due to the agency's enforcement-focused approach without creating industry-specific rules. Peirce argued that this approach harmed the public and impeded the agency's staff.
The SEC has recently dismissed lawsuits and ended investigations into several crypto companies, signaling a reevaluation of how crypto companies should comply with federal securities laws. Peirce emphasized that the SEC will continue to use enforcement when necessary.
Less than a day after the SEC formally dismissed its lawsuit against Coinbase, the chief of the agency’s new crypto task force appeared to blame the policy developed by the agency’s former chair, Gary Gensler, for the proliferation of fraud in the industry over the last several years. In a statement published Friday, SEC Commissioner Hester Peirce argued that by targeting the crypto sector with far-reaching enforcement actions and pointedly declining to create industry-specific rules, the agency actually increased the proliferation of fraud and malfeasance under former President Joe Biden.
Peirce and her colleagues have unwound the bulk of Gensler’s crypto caseload, dismissing lawsuits and ending investigations into the likes of Robinhood, Uniswap Labs, OpenSea, Consensys, and Coinbase. After the SEC filed to dismiss its suit against Coinbase on Thursday, the agency suggested in a statement that it has opted to effectively wipe the slate clean and start fresh with its assessment of how crypto companies should best comply with federal securities laws.
While that reevaluation looks poised to favor the crypto industry—and already has benefited its top exchanges and secondary marketplaces—legal experts told Decrypt earlier this week that some token issuers are still likely to face scrutiny from the regulator. Indeed, Peirce reiterated today that the public shouldn’t expect the SEC to pull back entirely, nor should fraudsters expect to act with impunity: “does not signal an end to the Commission’s use of its enforcement tool in appropriate cases,” she said.