Gurbir Grewal, the director of the Division of Enforcement at the SEC, has refuted claims that the agency is improvising regulations for the cryptocurrency sector.

During an SEC Speaks event, he emphasised that the SEC's application of the Howey test to determine what constitutes a security has been both clear and consistent.

Grewal criticised crypto companies for their numerous inventive efforts to evade SEC rules while operating in the United States, addressing concerns over the SEC allegedly overreaching its authority or engaging in "regulation by enforcement" through legal actions against such firms.

Highlighting the necessity of enforcement, Grewal pointed to the case of Sam Bankman-Fried, the former CEO of FTX.

Bankman-Fried was recently sentenced to 25 years in prison for defrauding investors, leading to severe financial hardships for many, including those who had to sell personal assets or take on additional work to compensate for their losses.