The SEC is being sued over the recently finalized Dealer Rule expansion, which redefined the term to require more crypto organizations to register with the SEC and comply with securities laws. The lawsuit argues that the SEC did not address public concerns and failed to consider the expansion's negative consequences. The Blockchain Association and Crypto Freedom Alliance of Texas are advocate groups representing the industry and pushing for better crypto legislation.

Robinhood Crypto received a Wells Notice from the SEC, signaling a potential enforcement action for alleged securities violations. The notice is one of many that the SEC has recently issued to crypto firms (e.g., UniSwap & Consensys) challenging the classification of digital assets on their platforms.

In an appearance on CNBC, SEC Chairman Gary Gensler said he believes there is a disproportionate amount of scams, fraud, and media attention in crypto compared to its market cap. He believes that the attention given to the SEC's crypto enforcement is a function of the fact that that's where the media's attention is and that he is frequently asked about crypto by financial media. Gensler did not comment on recent Wells notices or lawsuits facing Robinhood, Consensys, and others.

The SEC has delayed a decision on the Invesco Galaxy Ethereum ETF until July 5, 2024.

The SEC has asked the court proceeding over its lawsuit against Coinbase to reject Coinbase's petition asking for a new regulatory system for crypto. In March, Coinbase claimed that the SEC does not have the authority to extend securities rulings to apply to crypto. The SEC sees its incremental application of existing regulations to crypto as reasonable and within its discretion.

The SEC has approved eight spot Ethereum ETFs from issuers, including BlackRock, Fidelity, and Grayscale, months after approving spot Bitcoin ETFs. While the approval of the 19b-4 forms marks a significant step, trading will only start after the S-1 statements have been registered, which may take weeks.

David Hirsch has departed from his role as the SEC's Head of Crypto Asset and Cyber Unit in the Division of Enforcement. He spent nine years with the agency. Ladan Stewart, who brought cases against Ripple and Coinbase for the SEC, left earlier this year.

In a recent interview with CNBC's Squawk Box, SEC Chair Gary Gensler emphasized the urgent need for investor protections within the cryptocurrency industry. He warned that without these safeguards, the sector is unlikely to endure. Gensler pointed to the significant turmoil experienced in the crypto market over the past few years, highlighting the collapse of major firms such as FTX, Three Arrows Capital, and Celsius. He noted that many prominent figures in the industry have faced legal consequences, including FTX's Sam Bankman-Fried, who was sentenced to nearly 25 years in prison for fraud. Gensler's comments reflect a broader concern about the lack of trust and accountability in the crypto space, which has seen tens of billions of dollars lost due to bankruptcies and mismanagement. He stated, "What innovative field in America survives without having building trust in that field and protecting investors or consumers?" This underscores his belief that investor protection is essential for the sustainability and growth of the industry. While Gensler has classified most cryptocurrencies as securities, he reiterated that Bitcoin is an exception. He encouraged the registration of crypto platforms with the SEC to ensure compliance and transparency. Gensler also mentioned that investors can now express their views on Bitcoin through exchange-traded products, which provide a regulated avenue for investment. The discussion also touched on the political landscape, with Gensler being asked about the differing views on cryptocurrency from presidential candidates Vice President Kamala Harris and Donald Trump. Harris has expressed a commitment to fostering innovation in digital assets while ensuring consumer protection, whereas Trump has criticized regulatory actions against crypto and proposed his own crypto initiative. Gensler refrained from commenting on the political implications but maintained that investor protection is crucial for fostering innovation across all sectors. Overall, Gensler's remarks highlight the SEC's ongoing efforts to regulate the cryptocurrency market and the importance of establishing a framework that protects investors while allowing for innovation.

Gurbir S. Grewal, the Enforcement Director of the Securities and Exchange Commission (SEC), is set to leave the agency after a notable 21-year career, with his official departure date scheduled for October 11, 2024. During his three years as the top enforcement official, Grewal was instrumental in filing enforcement actions against approximately 100 cryptocurrency firms, including major players like Coinbase, Kraken, and Ripple Labs, as well as international entities such as Binance. His tenure has been marked by a significant focus on the cryptocurrency sector, which has often been met with skepticism from industry participants who view the SEC's approach as "regulation by enforcement" rather than providing clear guidance. SEC Chair Gary Gensler praised Grewal's commitment to protecting investors and ensuring compliance with securities laws, highlighting his leadership in a division that has acted decisively based on facts and legal standards. Under Grewal's direction, the SEC authorized over 2,400 enforcement matters, resulting in more than $20 billion in financial recoveries, including disgorgement, prejudgment interest, and civil penalties. Additionally, the agency awarded over $1 billion in whistleblower awards during his time. As Grewal prepares to step down, speculation has arisen regarding the timing of his departure, particularly in relation to the cryptocurrency landscape. Some industry observers, including Bill Hughes from Consensys, have suggested that Grewal's exit may be planned as he transitions to a new role in the private sector in 2025. The SEC's fiscal year recently concluded, which may have influenced the timing of his announcement. Gensler's own term as SEC Chair is set to expire on June 5, 2026, adding another layer of uncertainty to the agency's future direction regarding cryptocurrency regulation. The SEC has faced criticism for its broad assertion that all crypto tokens are securities, a claim that has been challenged by lawmakers and has faced scrutiny in various court cases. Overall, Grewal's departure marks a significant moment for the SEC and the cryptocurrency industry, as it raises questions about the agency's regulatory approach and the potential for changes in leadership and policy direction in the coming years.