The U.S. Securities and Exchange Commission has spent the last four years attempting to rein in the largely unruly world of cryptocurrency trading. And that isn’t going to change under Gary Gensler’s watch, it appears.

The newly appointed SEC chairman today told the virtual attendees of the American Bar Association’s mid-year program that more enforcement action—the kind that put an end to lucrative initial coin offerings (ICOs)—could be heading to cryptoland.

“We’ve brought some cases involving retail offerings of security-based swaps," Gensler said. "Unfortunately, there may be more."

The SEC chairman was referring to the trading of so-called stock tokensthat is, cryptocurrencies that function as synthetic representations of a traditional stock, such as Apple or Tesla. These tokens are typically created on the Ethereum blockchain.

"Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities," Gensler said. "These platforms—whether in the decentralized or centralized finance space—are implicated by the securities laws and must work within our securities regime."

Some of the biggest cryptocurrency exchanges in the world offer stock tokens to their customers. FTX, which just yesterday announced a $900 million funding round at an $18 billion valuation, is one of the exchanges leading this charge. It does not, however, make such investment products available to U.S. clients, presumably because the SEC has already made it crystal clear that security-based swaps, regardless of the crypto packaging, must abide by federal securities laws if they are to be traded in the U.S.

But at least one crypto company in the U.S. saw fit to test these waters, regardless of the legal precedent. Abra, a crypto investment platform and digital wallet, began offering tokenized versions of Apple, Google, and Netflix stock to U.S. customers in mid-2019. It ceased doing so in July 2020, following fines from both the SEC and CFTC.

Binance, the largest exchange in the world by trading volume, announced just five days ago that it would stop offering stock tokens globally. Clearly, some of the biggest players in the space can see which way the regulatory wind is blowing.

Meanwhile, Gensler, who some industry insiders believed would take a more lenient approach to crypto compared to his predecessor Jay Clayton—and even potentially approve that elusive Bitcoin ETF, appears poised to maintain the Commission's status quo. Gensler once taught a course on Bitcoin and blockchain at MIT and has called crypto a "catalyst for change."

But crypto knowledgeable doesn't necessarily equate to "crypto friendly," as Gensler demonstrated today.

Editor's note: This article was updated after publication to include additional comments from Gary Gensler at the American Bar Association event.