“The SEC’s approach is wrong, and I think that they’re already paying for it,” stated Dr. Zvi Gabbay, a partner and the head of the Capital Markets Department at the Barnea & Co. law firm, in a critical commentary on the US Securities and Exchange Commission’s (SEC) current strategy in dealing with the cryptocurrency market.
This sentiment, expressed in a two-part interview with Finance Magnates, comes in the wake of the SEC’s aggressive legal actions against key players like Coinbase, Kraken, and Binance, despite their notable loss against Ripple.
Gabbay’s remarks reflect the growing tension between the regulatory body and the crypto industry. He added, “What’s amazing is that even though they’re paying for it, they go ahead and file a complaint against Kraken, which basically shows that they’re not hearing the message.”
This unfolding scenario highlights a significant battle, with the SEC on one side and, seemingly, the entire cryptocurrency sector on the other, casting doubts about the future alignment between regulatory efforts and industry interests.
Dr. Gabbay started his career as a prosecutor for the Tel Aviv District Attorney’s office. Later, he received the equivalent of a PhD in law from Columbia University. During his time in New York, he specialized in defense work related to the SEC, CFTC, and DoJ. Upon his return to Israel, he assumed the role of Head of Enforcement at the Israel Securities Authority. Subsequently, he transitioned into private practice focusing on capital market financial regulation and enforcement.
Today, the SEC filed a complaint alleging that Kraken operates as an unregistered national securities exchange, broker, and clearing house. We disagree with their claims and plan to vigorously defend our position. https://t.co/a0C4wzBo3f
— Kraken Exchange (@krakenfx) November 21, 2023
There has been a succession of legal battles between crypto entities and the SEC, and, referring to the Commission being denied, in October, an interlocutory appeal in its case against Ripple, Dr Gabbay explained: “Maybe to the average reader these are not dramatic decisions, but when I’m looking at the legal war in general, these are battles that matter a lot. This loss is a terrible loss for the SEC.”
And, it appears that courts and federal agencies that are usually inclined to side with regulators are not doing so when it comes to the SEC’s position on crypto.
“The SEC is doing things because they believe that…
