Mike Novogratz flags Gary Gensler’s bid to be the industry’s sheriff

The head of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, is “taking aim at” the industry, but that does not necessarily mean its demise. This was the view of Galaxy Digital founder Mike Novogratz at a Messari conference.

The executive weighed in on Gensler’s latest remarks to the Washington Post. In the interview he threatened to create problems for lending and trading platforms over alleged violations of the Securities Act.

“Undoubtedly, Gary wants to regulate. He wants to be the sheriff of “CryptoVille.” The next 6–12 months will be tough for industry players. We botched educating people in Washington — what digital assets are and what matters for the industry,” said the CEO of Galaxy Digital.

During his remarks, Novogratz said he planned to fund the work of lobbyists to help U.S. authorities understand digital assets.

Over the past months BlockFi and Celsius faced allegations from state regulators of selling unregistered securities.

Coinbase declined to launch USD Coin (USDC)-backed crypto-savings accounts due to the threat of litigation by the SEC.

The Commission was also reported to be studying Uniswap’s activity and, according to the media, a number of other DeFi projects in the sector.

“I suspect the SEC’s goal isn’t to “bring DeFi within regulatory frameworks,” since it hasn’t undertaken any effort in that direction at all. Just words and enforcement activity. It seems the true aim is to crush the market, as the SEC was credited with doing in 2018,” said lawyer Jack Chervinsky.

I suspect the SEC’s goal isn’t to «bring DeFi within a public policy framework» since it hasn’t made any effort to develop such a framework at all. Just words & enforcement activity.

Rather, the true goal seems to be crushing the market, as the SEC is credited for doing in 2018.

— Jake Chervinsky (@jchervinsky) September 22, 2021

Recently, a coalition of public-interest groups urged the SEC to intensify its fight against cryptocurrencies, including through regulating stablecoins, lending platforms, and bitcoin exchanges.

Earlier, Gensler said that regulation is necessary for the survival of cryptocurrencies.

In September, it emerged that Coinbase is preparing a draft federal regulatory framework for consideration by U.S. lawmakers.

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