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Given the intense political climate and the SEC’s ongoing scrutiny of cryptocurrency this year, many had hoped the SEC would ease its approach, especially with the upcoming election cycle. However, the SEC has instead intensified its actions, such as issuing a Wells notice to OpenSea. In a recent appearance on the Thinking Crypto podcast, Ron Hammond from the Blockchain Association explained that the increased activity from the SEC towards the end of the fiscal year is expected.
The SEC’s aggressive stance on cryptocurrency has also turned into a political issue, according to Ron. Despite the usual opposition from Republicans, who often criticize the SEC, there’s a growing concern among Democrats as well
He said that the government’s fiscal year ends in September, and agencies often increase their actions during this period to show they’re fulfilling their congressional mandates. This means there’s usually a flurry of activity as they try to boost their performance metrics.
While this kind of heightened activity is typical at the end of the fiscal year, he said that what’s striking is how intensely the SEC is focusing on the cryptocurrency sector. Although other sectors have faced scrutiny, the majority of the SEC’s recent enforcement actions have targeted crypto companies, including Wells notices, settlements, and fines.
According to him, this situation raises several questions for lawmakers such as:
- How is the SEC allocating its resources?
- Is the SEC overstepping its jurisdiction?
- Will the SEC be successful in these cases?
Chairman Gary Gensler is set to testify before both the House Financial Services Committee and the Senate Banking Committee soon, and lawmakers are likely to scrutinize the SEC’s focus on crypto. The upcoming hearings will be intense, with Congress members and their staff gearing up for heated discussions.
The key question now is whether the SEC will proceed with lawsuits following the Wells notices, such as the one sent to OpenSea. If they do, it could impact the regulatory landscape for cryptocurrencies. Meanwhile, there’s considerable pre-hearing activity aimed at framing this issue as more than just a partisan dispute—it’s about Gensler’s approach and the SEC’s role in regulating a major industry.