04 Apr

In a recent speech, Gurbir Grewal spoke at the annual "SEC Speaks" conference hosted by the U.S. The shortcomings of the current compliance implementation methods in the bitcoin business were highlighted by the Securities and Exchange Commission (SEC). 

Speaking during the two-day event hosted by the Practicing Law Institute, he expressed his admiration for the industry. For about fifteen minutes, the focus of his lecture was on how market players are being exploited in ever-more-creative ways to get beyond the SEC's regulatory framework.

Grewal's opinions are a logical result of the regulator's more stringent approach to cryptocurrencies, since the sector is becoming more and more at odds with them.

The Howey test and cryptocurrency laws

Grewal outlined the Howey Test, a benchmark developed from a 1946 Supreme Court decision, which forms the basis of the analytics. 

The SEC now employs a test to determine whether a given asset qualifies as an investment contract and is thus subject to the securities classification regime. Grewal reiterated that the Howey Test should be used as a standard in any situation involving suggestive intent and expectation of profit; otherwise, other frameworks put out by the cryptocurrency sector will not be upheld.

This stance supports the same ideas as SEC Chair Gary Gensler, who consistently maintains that the majority of cryptocurrencies need to be treated like securities.

 The legal dispute resulted from the disagreement over which one the court should interpret. Coinbase and other companies opposed the classification of cryptocurrency assets as securities by drawing a comparison between them and collectibles. 

Despite the fact that Mr. Grewal's remark made it quite clear that he has nothing to do with these comparison analyses, the SEC is too eager to use the Howey Test as its primary criterion for evaluating crypto assets.
Looking for honesty and obedience

Grewal's criticism focuses on the issues of integrity in the cryptocurrency business in addition to regulatory concerns like the testing's breadth.

 He has drawn attention to the market infractions, the delusions, and the deliberate manipulations done to circumvent the SEC's supervisory position. These people's sentiments show that the legal background of the American market is either completely ignored or misunderstood.

In contrast, Mr. Grewal acknowledged that the SEC has been criticized for exceeding its jurisdiction and for operating as an enforcement body without a regulatory framework. Although he made it apparent that his viewpoint was unrelated to the organization's official position, he underlined that the matter still needed to be addressed in order to increase compliance and provide clear guidelines and regulations for the cryptocurrency sector.

April 2024, Cryptoniteuae

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