The US Securities and Exchange Commission is to deeply scrutinize crypto through its all-new Office of Crypto Assets under the Division of Corporation Finance’s Disclosure Review Program. It will streamline the agency’s reviews of documents submitted by crypto firms by folding them all under one roof.
The SEC has enhanced its purview over the digital asset industry. It implemented the Crypto Assets and Cyber Unit under the Division of Enforcement. Gary Gensler, the SEC chairman, said the watchdog plans to boost its crypto-focused headcount by 50, as such, directed more resources to combat those harming investors. Over the past couple of months, the SEC has made concerted efforts to assert itself as the primary government agency whose duty is to regulate most digital assets. Gensler reaffirmed last week that most cryptocurrencies should fall under the jurisdiction of the Commodities Futures Trading Commission (CFTC).
Ian Corp, a commercial litigator and crypto advisor at Argentis, said the SEC is multiplying efforts to continue regulating by enforcement rather than engage in transparent rulemaking. The regulator has brought several lawsuits against industry participants, the most renowned case being Ripple Lab the company behind the XRP token. SEC most recently slapped a former Coinbase employee Ishan Wahi with insider trading allegations. This could set precedence for further crypto enforcement as it concerns nine tokens deemed securities by the agency.
SEC is flagging intention to scan incoming filings, without directly advising which tokens and organizations are subject to the agency’s law, for compliance mishaps to make an example.