SEC Official: Violating exchanges not limited to Coinbase and Binance, DeFi platforms cannot evade regulation by proxy.

The head of the SEC enforcement division attended the Chicago Central Securities Enforcement Forum, where he stated that the SEC is fully aware of the existence of numerous illegal cryptocurrency exchanges and pointed out that projects labeled as DeFi cannot evade regulation.

SEC: Violating Exchanges Not Limited to Coinbase and Binance

The Securities and Exchange Commission's (SEC) enforcement division for crypto assets and the internet has been rapidly bringing crypto-related lawsuits in recent months. Despite this trend seemingly intensifying after the FTX bankruptcy incident, David Hirsch, the head of the division, stated that the SEC has never stopped monitoring crypto exchanges and DeFi projects.

According to a report by CoinDesk, David Hirsch mentioned that his division has been investigating all similar exchanges, and in fact, the misconduct of exchanges goes beyond just Coinbase and Binance.

He said:

We will continue to bring charges, and the SEC is also looking at many businesses operating similarly to Coinbase and Binance. In fact, the SEC's focus on cryptocurrency goes far beyond these high-profile exchanges. We will continue to be aggressive with these intermediaries, whether brokers, exchanges, or clearing agencies; they must register or they cannot provide full disclosure.

Hirsch also emphasized that DeFi projects cannot evade regulation.

SEC: Labeling as DeFi Does Not Prevent Regulation

Hirsch stated that the SEC will remain active in the crypto space, and labeling projects as DeFi does not prevent SEC oversight.

However, the SEC has faced challenges as well, with the significant attention drawn to its loss in the Ripple case.

Recap: After reading the XRP court documents, explaining why XRP and the cryptocurrency industry still face securities risks

Hirsch explained that the SEC's enforcement approach was previously more cautious, typically targeting large regulated companies on Wall Street that would quickly engage in settlement negotiations after being accused. However, accusations against crypto companies often directly impact their survival, leading crypto firms to often resort to court battles.

Myriad of Cryptocurrencies, SEC Struggling

Hirsch acknowledged that the SEC's enforcement budget is quite limited, especially with multiple lawsuits currently in progress.

He stated:

The number of existing cryptocurrencies, based on the last count I saw, is probably around 20,000 to 25,000, which is far more than the investigative resources of the SEC or any organization, and there are also many centralized platforms operating unregistered exchanges.