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BlockFi Settlement Shows SEC Enforcement Focus, Ex-regulators Say

Bracewell’s Anne Termine discussed with CQ Roll Call how the Securities and Exchange Commission’s charges against BlockFi Lending LLC for failing to register its cryptocurrency lending product as a security shows the agency’s intent on regulating by enforcement.

The case is consistent with SEC Chair Gary Gensler’s public stance that crypto products are likely securities and so should be registered with the agency, said Termine.

“This case demonstrates the SEC’s willingness to use the enforcement program in support of these positions,” Termine told CQ Roll Call. Gensler has repeatedly called crypto the “Wild West” and has urged platforms to register with the agency.

Termine said this action, along with congressional hearings on crypto regulation, emphasize the importance for companies to engage on both regulatory and legislative fronts if they want to shape their future.

“Otherwise, the risk is that enforcement actions will shape it for them,” she said.

Click here to read more from CQ Roll Call (subscription required).