Director Grewal is certainly correct that trust in established institutions is on the decline. According to the , public trust in the U.S. government is the lowest in 70 years with just one percent trusting the government to do what is right just about always and only 15 percent saying that they trust the government most of the time.  

Against that background of mistrust of the government, the SEC Director admonishments against financial market participants seems…

This is an instance where the actual rule violation, failure to qualify employees, is very straightforward.  Throwing on a Rule 2010 violation adds nothing to the matter. Rule 2010 might as well "say thou shalt violate no other FINRA rule."

It is unlikely that the firm was maliciously reporting securitized transactions to TRACE that were not required to be reported. The trade reporting rules have gotten to be so complicated that firms struggle to understand what is required. Rather than imposing significant fines, FINRA should view most violations as opportunities to explain what the firm misunderstood and to clarify the relevant rules.  

While the dropping of the charges is certainly a victory for the individual defendants and perhaps for the crypto industry, it does not reflect well on the SEC.  

The SEC has taken the view that all sales of cryptocurrencies (except Bitcoin and possibly Ether) are sales of securities on the basis that they constitute investment contracts. The SEC has taken this view without a meaningful attempt to analyze what is it about any individual sale that constitutes the investment…