Crypto Crackdown: Lawyer Predicts Even Worse To Come From SEC

Government authorities worldwide are watching the crypto market and exchanges’ services to handle the global economic crisis. Thus, regulatory measures and concerns have grown alongside the crypto business.  The SEC has been focused on exchanges under its authority that offer crypto-related “securities.” Thus, legal experts anticipate much stricter SEC actions. 

Pro-crypto lawyer Jesse Hynes feels the worst is yet to come in the bitcoin crackdown. Hynes claims investors will benefit.  Hyne’s remark highlighted crypto businesses’ “deceptive” marketing techniques to recruit investors. These companies use “own,” “earn,” and “decentralized” to promote investment and community involvement. 

Hynes notes that these “marketing tools” often misrepresent the organization and its operations. He adds: Investors should be given legal rights, entitlements, and protections for their acquisitions. Expect this. Many crypto and NFT developments will be considered security raisers. 

Jesse Hynes’ comment further explains that he is not implying that all non-fungible tokens (NFTs) or cryptocurrencies are securities, as the SEC has stated in other situations. Instead, many were “packaged” and sold as security during fundraising rounds. Hynes further claims that the regulatory structure is “messed up and backward,” making it ineffectual at catching industry baddies. He believes the most prominent actors will be targeted first. 

They may be more prominent and “easier” to regulate or more likely to draw US regulators due to their larger public profile. He concluded: I believe we will achieve investor protections.  The journey will be slow and miserable.  The SEC is fighting the XRP lawsuit and Binance.US’s “unregistered securities exchange” charges. New additions will boost enforcement at the regulatory agency.

These events suggest the SEC may step up crypto regulation and securities law enforcement. Since October 2022, the SEC has faced Senate criticism. The crypto sector has criticized and challenged SEC for this. The Senate claims SEC Chair Gary Gensler has overstepped his authority and is hostile to the business. Since mid-2022, the SEC has lost staff.

However, a clear legal framework would help the crypto business innovate and flourish, offering customers options and services to weather current and future financial crises.