A spokesperson for the U.S. Securities and Exchange Commission (SEC) has warned that the regulator is ready to file more criminal charges in the near future against crypto exchanges and DeFi projects that violate securities laws.
Speaking at the Securities Enforcement Forum Central 2023 conference, David Hirsch, Chief of the SEC’s Crypto Asset and Cyber Unit, said that the U.S. market is flooded with cryptocurrency exchanges and DeFi projects that violate laws.
According to Hirsch, his department will keep charging crypto companies, adding that the regulator is actively monitoring certain members of the DeFi ecosystem and is ready to file charges against them in the near future.
However, Hirsch also mentioned that the agency’s attention is drawn not only to major cryptocurrency exchanges. The regulator inspects brokers, dealers, clearing agencies, and any other organizations active in this field. Hirsch emphasized that the SEC’s jurisdiction extends to absolutely all participants of the cryptocurrency market, saying that all crypto companies that are unregistered or conceal their processes will be checked by the agency sooner or later.
“We’re going to continue to conduct investigations, we’re gonna be active in the space,” Hirsch added.
Nevertheless, Hirsch admitted that the agency’s current litigation load is quite substantial, and the SEC can’t pay enough attention to new cases. The agency is currently involved in several complex lawsuits, particularly against Ripple, Coinbase, and Binance.
According to the SEC’s representative, the regulator is experiencing some difficulties due to the limited budget. Thus, Hirsch stressed the fact that the agency’s charges often relate to large financial organizations, which can easily afford the most expensive lawyers that prolong the judicial process and complicate the work of the regulator.
Cryptocurrency companies previously preferred to enter into agreements with the SEC in case of charges against them and pay the fine. Recently, however, more and more defendants have opted to “come to grips,” viewing the regulator as a weak adversary.
At the end of the talk, A. Kristina Littman, the conference’s moderator and Hirsch’s predecessor as Crypto Enforcement Chief, said the SEC is “at capacity.” Hirsch stated that the agency will fight to the last, although he admitted that the regulator is far from constantly achieving its goals.
While the SEC’s actions are heavily criticized, the Commodity Futures Trading Commission (CFTC) is developing a regulatory framework for the cryptocurrency market, planning to occupy the place of the primary regulator.