If you actively trade crypto, you've probably noticed how SEC decisions literally shake the entire market. I recently wondered — what exactly is this agency, and why does its word carry such weight for us?
Here's the deal: SEC stands for the Securities and Exchange Commission, a federal agency in the United States that oversees compliance with American securities laws. It was established back in 1934, after the Great Depression. Currently, it’s led by Gary Gensler, a name that’s definitely familiar to anyone following crypto news.
In general, the SEC is responsible for regulating compliance with federal laws in the financial market, protecting investors’ interests, ensuring transparency of operations, approving new securities offerings, and monitoring the information companies provide to their investors. It may not sound very crypto-friendly, but this is exactly why the SEC has such enormous significance for us.
Structurally, the SEC consists of five divisions — the Investment Management Division, the Corporate Finance Oversight Body, the Market Trading Department, the Legal Department, and the Risk Analytics team. Each handles its own piece of the pie.
But here’s the crux — although the SEC’s authority applies only within the US, it still influences the entire global market. The US remains the world’s largest financial center, so any decision made here resonates worldwide. Gensler considers the cryptocurrency market risky, recognizes Bitcoin only as a commodity, not a security, but demands that crypto companies comply with all established rules.
And here’s where it gets interesting. Under this chairman’s leadership, the SEC has filed several high-profile lawsuits. Major crypto exchanges have been accused of trading unregistered securities. Ripple has been in litigation with the SEC since late 2020 over XRP — the agency claimed that the company raised over $1.2 billion by selling unregistered securities. In early 2023, the SEC filed a lawsuit against the issuer of the BUSD stablecoin, claiming it was also an unregistered security. At that time, the price of BUSD plummeted.
Every such lawsuit sparks panic in the market. Prices drop, investors get nervous, tokens that the SEC labels as securities lose value. This shows how significant the SEC’s influence is on the entire crypto economy, despite its jurisdiction officially being limited to the US.
Currently, the SEC is also scrutinizing stablecoins like USDT and USDC, studying DeFi, and demanding that all relevant players follow its rules. If you’re in crypto, you understand — this isn’t just regulation, it’s a reformatting of the entire industry. And the decisions the SEC makes will shape the direction of the crypto market for years to come.
