SEC Chair Gensler Highlights Agency's "Effective Administration" of Securities Laws

Car Keys, Football, and Effective Administration

Not every asset is a security. Former Chairman Clayton and I have both said that bitcoin is not a security, and the Commission has never treated bitcoin as a security.

Our focus, rather, has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities. Putting this in context, aside from bitcoin, ether, and stablecoins, the rest of this market approximates $600 billion. That’s less than 20 percent of the whole crypto market and less than one quarter of one percent of the worldwide capital markets.

Let me make two points.

First, those parties offering or selling securities to the public need to register and give proper disclosure to the public. Second, the intermediaries—broker-dealers, exchanges, clearinghouses—need to be registered and properly regulated as to conflicts, disclosures, and business conduct.

Prior to my arrival at the Commission, numerous filings for exchange-traded funds (ETFs) and products (ETPs) for bitcoin had been disapproved or withdrawn at the SEC staff’s request. Shortly after I arrived in 2021, the first bitcoin futures ETF went effective after consultation with SEC staff. Though we initially followed in our predecessor’s footsteps with regard to ETPs that hold physical bitcoin, the Commission approved ETPs for physical bitcoin and ether earlier this year. Subsequently, in contrast with non-compliant crypto asset markets, investors in these products have gotten the benefits of disclosure, oversight, lower fees, and greater competition.

Trump Taps His Former SEC Chair Jay Clayton to Lead SDNY

President-elect Donald Trump has tapped Jay Clayton to serve as US Attorney for Manhattan, leading the Justice Department office known as being the sheriff of Wall Street.

The appointment, which was announced in a post by Trump on Truth Social, marks a potential shift to criminal law enforcement for Clayton, who led the US Securities and Exchange Commission during Trump’s first administration. Since leaving government, Clayton has served as Apollo Global Management Inc.’s independent chair and returned to New York-based law firm Sullivan & Cromwell as a senior adviser.

What to Expect from the SEC During a Second Trump Administration?

Given the recent news about President-Elect Trump’s cabinet appointments, it is a safe bet that the SEC Division of Enforcement’s priorities will change under the new administration. Under President Biden, SEC Chair Gary Gensler pursued a broad and aggressive enforcement agenda, with critics contending that the SEC pursued regulation via enforcement in areas like crypto currencies and digital assets, ESG, cybersecurity, and AI. If the dissents from Republican Commissioners Hester Peirce and Mark Uyeda are predictors, a Republican-appointed SEC chair is expected to pare back the scope of the SEC’s enforcement agenda, including its pursuit of controls violations, and, perhaps, return the agency to “bread and butter” securities enforcement. With the heavy caveat that much will depend on the next SEC chair’s enforcement priorities, here are our preliminary predictions for what to expect from SEC Enforcement going forward.

Razzlekhan's Husband Gets Five Years Prison Sentence for Bitfinex Hack

Ilya Lichtenstein was sentenced to five years in prison for his role in the theft of approximately 120,000 bitcoin (BTC) from crypto exchange Bitfinex, the U.S. Department of Justice has announced on Thursday.

The 35-year old hacked network in 2016, using “advanced hacking tools and techniques”. Once inside the network, Lichtenstein fraudulently authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to his own wallet. He then took steps to cover his tracks by deleting from Bitfinex’s network access credentials and other log files that could have revealed his conduct to law enforcement.

Ex-SEC Lawyers Agree: Crypto Enforcement Shackles May Take Time to Resolve

While an incoming chairman appointed by Trump, a recent crypto convert, could effectively clear the decks of future enforcement actions, dealing with the many cases already being litigated is a stickier prospect. Turning the SEC ship could take several months into 2025 — maybe longer. And even then, the lawyers say, dramatic case dismissals might not even happen.

What may be the most prominent of those outstanding federal cases is the SEC’s battle with Ripple Labs, representing the first big dispute in which the agency accused the company of acting as a securities exchange without registering. The chairman then was Jay Clayton, not the industry-loathed Gensler. And the president who appointed him? Donald Trump.

“The reality is that the SEC’s current approach to crypto really began under the last administration,” said Ladan Stewart, a partner at White & Case who was a top enforcement lawyer at the SEC and led some of its big crypto cases.