ANALYSIS: Crypto Enforcement Gears Up as the States Set the Pace

The Securities and Exchange Commission intends to become “the primary cryptocurrency cop,” but SEC Chair Gary Gensler’s position that cryptocurrencies are regulated under securities law depends on the outcome of the SEC’s enforcement suit against Ripple Labs Inc.

State securities regulators, on the other hand, have already been active in policing cryptocurrency-related products without depending on tokens being securities. That’s because state enforcement treats cryptocurrency as an investment, or value given, for a financial product that can be categorized as a security. This increase in state activity will likely continue into 2023.

If the Southern District of New ...