SEC’s Gurbir Grewal to Step Down as Enforcement Director

The U.S. Securities and Exchange Commission (SEC) has announced that Gurbir Grewal will step down as Director of the Division of Enforcement after three years in the role.

Today we announced that Gurbir S. Grewal, Director of the Division of Enforcement, will depart the agency, effective Oct. 11, 2024. https://t.co/4wXy6ka0qM pic.twitter.com/mnVf378bPi

— U.S. Securities and Exchange Commission (@SECGov) October 2, 2024

From October 11, 2024, Grewal’s deputy, Sanjay Wadhwa, will serve as acting head of the division. Chief Counsel Sam Waldon will temporarily fill Wadhwa’s position.

“Every day he thought about how best to protect investors and help market participants comply with our time-tested securities laws. He led the division without fear or favour, following the facts and the law wherever they led. I greatly enjoyed working with him and wish him all the best,” commented SEC Chair Gary Gensler on the executive’s departure.

During Grewal’s tenure, the agency sanctioned enforcement actions against over 100 cryptocurrency companies. These included major American players like Coinbase, Kraken, and Ripple, as well as international giants such as Binance.

In total, Grewal initiated 2,400 administrative cases for securities law violations, resulting in over $20 billion in disgorgement, civil penalties, and pre-trial settlements. The Commission also allocated more than $1 billion in whistleblower rewards.

Experts Doubt Change in SEC Policy

The agency’s crypto industry penalties for the 2024 fiscal year reached a record $4.7 billion, primarily due to the settlement of claims against Terraform Labs and its former CEO Do Kwon for $4.47 billion.

The SEC’s “enforcement-driven” regulatory approach has drawn criticism from crypto companies, some politicians, and even within the agency itself.

The community dubbed Grewal the “chief instigator of Gensler’s aggressive attack on cryptocurrencies.”

Senior Counsel and Director of Global Regulatory Matters at ConsenSys, Bill Hughes, dismissed rumours that leadership changes at the Commission are related to the digital currency industry.

oh god here come the wild conspiracy theories. My frens, the end of the fiscal year was two days ago and he’s served for a couple of YEARS now in a demanding job. Sometimes you know when you are going to exit so you can take some time off before starting your big fancy new…

— Bill Hughes : wchughes.eth ? (@BillHughesDC) October 2, 2024

“Oh god, here come the wild conspiracy theories. My friends, the end of the fiscal year was two days ago, and he [Grewal] has already worked a couple of years in a demanding position. Sometimes you know when you are going to exit so you can take some time off before starting your big fancy new job in the private sector in 2025,” said the expert.

David Olivenstein, a partner at Pillsbury Winthrop Shaw Pittman and former SEC attorney, confirmed to Bloomberg that Grewal’s departure does not signal any policy softening.

“Sanjay [Wadhwa]’s approach to enforcement is at least as aggressive,” he emphasized.

In the U.S. Congress, there is an initiative to examine the SEC for politically motivated hiring practices, while billionaire and crypto investor Mark Cuban has expressed readiness to replace Gensler as head of the agency.