The US Securities and Exchange Commission [SEC] wound up its investigations into a bunch of crypto-related companies this week.
Background
- The ones let off the leash include Coinbase, OpenSea, Uniswap, Gemini, and Robinhood
- Specifically, the SEC has agreed “in principle” to dismiss its case against Coinbase where it had alleged that the exchange violated US securities laws
- Parallelly, Uniswap Labs also confirmed that the agency has closed its investigation into the company with no enforcement action
- Meanwhile, during Gensler’s regime, OpenSea was told that the non-fungible tokens (NFTs) listed on the platform were unregistered securities
- However, now, the SEC has taken a step back and affirmed that it doesn’t intend to take any enforcement action against the NFT marketplace
- Gemini’s litigation counsel was also informed about the same
Why should you pay attention?
- Gemini’s co-founder Cameron Winklevoss highlighted that the agency’s decision to step back came 699 days after the start of their investigation and 277 days after they sent the company a Wells Notice
- Despite the relief, he said, this “does little to make up for the damage this agency has done to us, our industry, and America”
- Winklevoss went on to further emphasize that “it’s wholly unacceptable for an agency like the SEC to bully, harass, and attack a lawful industry and then decide one day to simply say we’re good and walk away”
- Unless there is a “cost and price to be paid” for this behavior, it will happen again
- In retrospect, to avoid similar cases from happening in the future, he recommended firing the staff involved in the SEC enforcement actions, barring them from working in any agency, and reimbursing affected firms
Who said what?
- In a blog post, Coinbase’s Chief Legal Officer Paul Grewal said,
"SEC staff has agreed in principle to dismiss its unlawful enforcement case against Coinbase, subject to Commissioner approval — righting a major wrong"
- He added,
"While dismissal will be a major win for the rule of law — and a clear vindication of our position — most of all, it will be a win for the entire industry and the 52 million Americans who have owned a digital asset”
- The team at Uniswap Labs emphasized,
“Uniswap Labs is grateful that this investigation is behind us and will continue to work constructively with regulators and legislators to develop a workable regulatory framework for crypto that supports a safer, more efficient, and transparent financial system”
- Meanwhile, Winklevoss said,
“I’m glad to be turning the page here as an industry, but this is not the end, rather the beginning towards ensuring this never happens again to the crypto industry or any other exciting, new frontier industry in the future”
Zooming out
- Former SEC Chair Gary Gensler ended up thrusting more than 100 hundred regulatory action cases against crypto firms during his reign
- He trod on the “regulation by enforcement” path
- Gensler resigned on January 20, 2025
