The 2023 Securities Industry and Financial Markets Association’s (SIFMA) Compliance & Legal Annual Seminar, as usual, was well attended by compliance and legal professionals, including FINRA executives and SEC directors. The three-day event held, where outside San Diego skies were overcast and grey, also coincided with the run on SVB, and gloomy forecasts for Signature Bank and First Republic. Inside, industry leaders, and regulators discussed legal trends on the horizon. Not surprisingly there was a focus on crypto at this year’s conference. While Reg BI, ESG, off-channel communications, cybersecurity and the foreboding banking issues (among others) were also hot topics being discussed by industry insiders, here we focus on crypto. Below are some key takeaways.
Expect More SEC Enforcement Actions with a Focus on Crypto
SEC Director Gurbir Grewal noted the Commission’s general intent to focus on enforcement actions and swiftly bringing those actions to resolution as a way to rebuild public trust in the markets, financial institutions and the Agencies. He also urged firms to self-report and stressed the need for robust compliance programs, especially as new rules and regulations continue to be issued. He took time to speak about crypto investments and noted that traditional firms generally “do not and cannot” participate in this space due to the lack of compliance and clear rules around these investments. He also noted that the SEC is doubling the size of its Crypto Assets and Cyber Unit in order to focus on crypto’s harm to investors; indeed the SEC has already brought more than 100 enforcement actions related to crypto. A fact which is reflected on the “SEC Crypto Assets and Cyber Enforcement Actions” website.