Top SEC director behind high-profile crypto cases is stepping down. (Photo by Michael M. Santiago/Getty Images)
Key Takeaways
- SEC Enforcement Director resigned on Oct. 2, the same day the agency filed an appeal in the Ripple lawsuit.
- Grewal’s sudden exit on a 9-day notice period prompted many to believe something was wrong within the SEC.
- Grewal led the Enforcement division and was instrumental in filing hundreds of lawsuits against crypto companies.
Gurbir S. Grewal, the Securities and Exchange Commission’s (SEC) enforcement director, is stepping down , effective Oct. 11.
The news sent ripples through the crypto community, particularly among those closely watching the SEC’s high-profile cases against Ripple and Binance, where Grewal played a key role.
The timing of his departure is especially noteworthy, coming on the same day the SEC filed its appeal in the Ripple lawsuit.
Did Grewal Pull a Hinman on Ripple?
The timing of Grewal’s resignation has raised eyebrows, with many drawing parallels to the December 2020 lawsuit against Ripple, which was filed just days before former SEC head William Hinman left the agency.
Grewal’s sudden exit has been met with a mix of celebration and concern. Republican Senator Tom Emmer, a vocal critic of the SEC’s approach to crypto regulation, tweeted that Grewal was at the forefront of “lawlessness and chaos” at the agency.
However, legal experts have expressed surprise at the abrupt nature of Grewal’s departure, with some questioning the lack of a replacement lined up. “It’s not normal for an SEC Enforcement Director to disappear like this—going on nine days’ notice with no replacement lined up,” tweeted Jake Chervinsky, chief legal officer of Variant.
Grewal’s Legacy: A Crackdown on Crypto
During his tenure, Grewal led the Enforcement Division with an iron fist, recommending over 100 enforcement actions , many of which targeted crypto firms.
His règime saw the SEC take aim at some of the industry’s biggest players, including Coinbase, Ripple, and Binance, accusing them of securities violations.
As the SEC’s blog notes, under Grewal’s leadership, the Division tackled “widespread noncompliance” in the crypto space, claiming that these platforms failed to provide adequate investor protection measures and neglected to comply with federal securities laws.
The Binance lawsuit, which resulted in a staggering $4.3 billion fine and the departure of CEO Changpeng Zhao, is a testament to Grewal’s zeal for enforcement. Meanwhile, Coinbase and Ripple are still battling the SEC in court.
However, Grewal’s sudden exit raises questions about the SEC’s approach to crypto regulation. With the agency facing intense scrutiny from the public and lawmakers, his departure could signal a potential shift in the SEC’s strategy.
The Enforcement Division is now in a state of flux, which may lead to delays in developing legal strategies. Moreover, high-profile resignations like Grewal’s can erode the SEC’s credibility and stability, potentially influencing public perception and the court’s view of its authority.
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