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Paradigm VP criticises SEC over crypto enforcement actions

Paradigm VP criticises SEC over crypto enforcement actions

GrafaGrafa2024/10/04 17:50
By:Isaac Francis

Paradigm's Vice President of Government Affairs, Alexander Grieve, has criticised the U.S. Securities and Exchange Commission (SEC) for its aggressive enforcement approach toward the cryptocurrency sector.

Grieve expressed concerns about the SEC's method of issuing subpoenas, Wells Notices, and lawsuits against crypto firms under the pretext of investor protection.

According to Grieve, the SEC has been “carpet-bombing” the crypto industry, targeting any entity that develops value-adding projects.

“Under this Chair, and this Enforcement Director — if you have built anything of value in crypto, you’ve found yourself on the receiving end of a subpoena, a Wells Notice, or an enforcement action/lawsuit, or all three,” Grieve stated.

He highlighted how companies like Coinbase, Kraken, and Binance have been subject to SEC scrutiny despite earlier regulatory approvals or settlements.

For instance, Coinbase received a Wells Notice in 2021 over its proposed Lend product just months after its initial public offering (IPO).

The SEC also took action against Kraken, resulting in the exchange relocating its staking services outside the U.S. and paying a $30 million fine.

Additionally, Binance has faced multiple regulatory actions across its operations.

Grieve also accused the SEC of "forum shopping," where the regulator chooses favorable jurisdictions to file cases, such as in Kraken, Coinbase, and Binance's separate lawsuits.

This tactic, according to him, increases the SEC's chances of favorable outcomes.

He further criticised the SEC's “barbell” regulatory approach, claiming it targets smaller firms with limited resources to settle cases, using those precedents to go after larger entities.

According to Paradigm’s research, the SEC has taken 171 enforcement actions against crypto firms since 2021, with the number rising under SEC Chair Gary Gensler.

Paradigm's previous reports also noted the SEC’s use of litigation to set policy, a point that has drawn criticism from policymakers, including SEC Commissioner Hester Peirce, who admitted flaws in the agency’s crypto policy enforcement.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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