Crypto firms may still face SEC penalties for self-reporting securities laws violations: Report
The U.S. Securities and Exchange Commission’s enforcement director has reportedly said cryptocurrency companies will not receive amnesty for reporting themselves for possible violations of securities laws.
According to a Monday report from Reuters, the SEC director of the agency’s division of enforcement, Gurbir Grewal, said the agency may view crypto companies’ conduct “more favorably” if they reach out first for self-reporting securities law violations. However, he added that though firms may face smaller penalties, they will not be completely off the hook.
"Our message to [crypto companies] is not, 'Register your product and we'll just ignore the billions you have under management in this crypto lending product and your violations of the securities laws,’" said Grewal.
The SEC enforcement director joined the agency from the New Jersey Attorney General’s office in July 2021. In November, he pushed back against criticism that the SEC would employ “regulation by enforcement” with respect to crypto and other securities:
Grewal’s reported statement seemingly stands in contrast to that of SEC chair Gary Gensler, who has repeatedly asked crypto firms to "come in and talk" — i.e. register their securities with the regulatory body. Gensler has said that many crypto firms and their products may fall under the regulatory purview of the SEC and need to be registered to ensure investors are protected. However, SEC Commissioner Hester Peirce, known by many in the space as “Crypto Mom”, has previously criticized the agency for its lack of regulatory clarity with respect to crypto firms and possible securities law violations.
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