Crypto companies that report their breaches of securities laws straight upfront shouldn’t expect the US Securities and Exchange Commission to grant them an amnesty in return. The SEC enforcement director Gurbir Grewal told Reuters on Monday.
Per the official,
“Our message to them 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.‘”
Grewal was, however, quick to add that self-reporting companies might get a lighter penalty for their violations and other help. He also told Reuters,
“Our message is that we’ll view their conduct more favorably if they come in — such as what the remedies will look like, including penalties, and finding a path to complying with the securities laws.”
The misty crypto regulatory landscape in the US
The crypto regulatory landscape in the US continues to remain foggy. For instance, there’s no clear distinction line drawn between what is a security and what isn’t, and blockchain company Ripple, via its lawsuit against the regulatory agency, is trying to negotiate that for the whole industry. Well, apart from the basic classification, there are several other regulatory question marks that have not been catered to yet.
Amidst all this, Grewal’s comments provide some clarity for crypto market participants about the SEC’s likely regulatory framework. Further development on these lines with respect to other dos and don’ts would end up encouraging novel institutional investors to step into the digital asset arena.
As of now, crypto exchanges in the US do not have a regulator that directly oversees the market’s activity. The US, the UK, and the EU are among several others worldwide intend to develop a comprehensive framework for the said asset class.
Nonetheless, the apex securities regulatory agency, the SEC, has toughened its crypto clamp-down under Gary Gensler. The Chair has been quite particular about regulations and has always advised market players not to skirt the law.