In two years of running the Securities and Exchange Commission, Gary Gensler said that he or his staff met dozens of times with cryptocurrency exchanges that were seeking special exemptions from the laws governing the rest of Wall Street. Those talks didn’t lead anywhere, and neither did Gensler’s efforts to cajole, prod and even threaten crypto into compliance. Now the SEC is unleashing a barrage of enforcement actions against crypto’s biggest middlemen, in a fight that has existential stakes for the companies and could define Gensler’s legacy, the Wall Street Journal reported. “I’ve been around finance for four decades,” Gensler said in an interview Tuesday. “I’ve never seen so much just noncompliance and hype masquerading as reality as I’ve seen in this field.” The SEC this week sued Binance, the world’s largest crypto platform, and Coinbase, the biggest U.S. platform. It said they operated as securities exchanges without properly registering their businesses with the SEC. The agency hopes courts will order the firms to follow its rules for stock exchanges or stop trading crypto assets in the U.S. The lawsuits, which the companies say are misguided, could take years to resolve. If the SEC lost either case, it would be a setback for the government’s ability to oversee the crypto market. The enforcement actions mark the culmination of a strategic pivot by the SEC under Gensler. Before he took the agency’s helm, the SEC had repeatedly sued individual cryptocurrencies — a potentially endless game of whack-a-mole in a market with thousands of assets. When Gensler took office in 2021, he urged enforcement staff to target the hubs that most investors use to buy and sell crypto.
