Securities and Exchange Commission Chair Gary Gensler on Thursday pushed back against claims from crypto-related companies, including Coinbase and Robinhood, that they couldn’t come in to register with the agency even if they so desired.
In prepared remarks before the 2023 Global Exchange and Fintech Conference, Gensler indirectly called out both Coinbase and Robinhood, which have repeated in recent days how they've attempted to register with the agency but been rebuffed.
"When crypto asset market participants go on Twitter or TV and say they lacked 'fair notice' that their conduct could be illegal, don't believe it," he said. "They may have made a calculated economic decision to take the risk of enforcement as the cost of doing business."
Following the SEC’s lawsuits against Binance and Coinbase this week, the latter’s chief legal officer, Paul Agrewal, told lawmakers that the company had tried and failed to register with the regulator, Coindesk reported. After months of discussions, the company was “simply dismissed with no response or any counter proposal or ideas coming back from the SEC,” Agrewal said. On Wednesday, Robinhood joined Coinbase as its chief compliance lawyer, Dan Gallagher, a former SEC commissioner, told lawmakers that they were also turned away by the agency.
“We went through a 16-month process with the SEC staff trying to register a special purpose broker dealer,” Gallagher said. “And then we were pretty summarily told in March that that process was over and we would not see any fruits of that effort.”
Gensler’s attacks on crypto are just the beginning of a protracted struggle that may play out in courts over the next few years. While he's often referred to the crypto space as “the Wild West” or crypto players as “casino operators,” he's also called repeatedly for companies to come in and register.
When asked about the companies’ claims during the question-and-answer session on Thursday, Gensler seemed to deny that they had been turned away.
“They know how to register,” added Gensler, who also pushed back on claims from crypto companies that SEC rules aren't clear. “We have addressed the crypto security industry through rulemaking as well, though many in the industry who have called for rulemaking have expressed dissatisfaction with said rulemaking."
