The U.S. SEC calls for strict enforcement of regulations against crypto players

The Investor Advisory Committee of the U.S. Securities and Exchange Commission (SEC) has called for strict enforcement of regulations against crypto players who offer unregistered securities.

In a letter addressed to SEC Chair Gary Gensler, the committee urged the regulatory agency to continue its aggressive crackdown on violators in the crypto space, including issuers, custodians, and unregistered trading platforms.

The letter also made it clear that the committee considers “virtually all” crypto tokens to be financial securities, a view shared by Gensler himself, who has previously stated that all cryptocurrencies, except Bitcoin, are securities.

The SEC committee expressed concern about the numerous players in the crypto sector who are associated with illegal activities, resulting in significant losses to investors, many of whom are unsophisticated and minority investors seeking quick profits.

To prevent further losses, the committee emphasized that all crypto tokens, as well as the platforms and custodians dealing with them, are subject to regulation under federal securities laws to safeguard investors.

The advisory committee recommended that the SEC oppose legislation that would provide special exemptions to securities regulations for crypto assets. This move follows the SEC’s recent fines against crypto exchange Kraken and Binance USD stablecoin issuer Paxos for providing unregistered securities services.

In March, Coinbase was also warned of potential legal action against the exchange for violating securities laws with its staking services, which Coinbase’s CEO Brian Armstrong denies.

However, Republican Congressman Tom Emmer has criticized Gensler’s approach to crypto regulation, accusing the SEC chair of “blindly spraying the crypto community with enforcement actions while completely missing the truly bad actors.”