Gurbir S. Grewal, Director of Enforcement at the US Securities and Exchange Commission (SEC), discussed cryptocurrency regulation at a seminar held by the William & Mary School of Business in early this month. He emphasized the necessity of enforcing federal securities laws in the constantly evolving cryptocurrency market. Grewal pointed out that the fundamental definition of securities in the 1946 Supreme Court ruling of SEC v. Howey still applies to new investment schemes, including crypto assets.

The SEC Director highlighted the significant investor losses caused by fraudulent crypto activities and stressed the urgent need to address these harms. He mentioned numerous charges against issuers for conducting unregistered and fraudulent offerings. Grewal emphasized that innovation and compliance with securities laws are not mutually exclusive, and securities regulators are committed to working with cryptocurrency entrepreneurs to ensure compliance and promote technological progress. Finally, he stressed the necessity of strong enforcement to maintain public trust, protect investors, and enhance confidence in the financial markets through holding wrongdoers accountable and cultivating a culture of compliance.