Crypto watchdogs ramp up enforcement as lawmakers consider an alt path

The playing field… SEC Chair Gary Gensler had vowed to crack down on crypto’s Wild West ways, and his agency has put its (fiat) money where his mouth is. SEC enforcement actions against crypto firms shot up 53% last year to nearly double 2021 levels (when Gensler’s tenure began). Crypto leaders accuse regulators of rulemaking by enforcement and say they want clarity. It may be coming. Last week the US House passed an industry-backed bill despite opposition from Gensler, and earlier this month the Senate voted to reject the SEC’s controversial crypto-custody guidance.

The players… The commission’s worked to try to rein in crypto. It’s sent Wells notices to Consensys, Uniswap, and Robinhood (disclosure: Robinhood owns Sherwood Media). And it’s sued industry titans XRP and Coinbase. But crypto’s pushed back: Consensys sued the SEC over its ethereum regulations last month, and in February Lejilex sued, too, accusing the regulator of overreach. Plus, crypto PACs have raised $100M+ ahead of this year’s US elections. FYI: Coinbase and Ripple contributed about half of that.

The positions… Lately the GOP has been viewed as more of a crypto-industry ally than Dems. But last week’s bipartisan House bill passed with support from 71 Democrats. Plus, 11 Senate Dems recently defied President Biden to help pass the measure that would roll back some SEC crypto guidance.