The Securities and Exchange Commission announced Monday that it’s charging Bittrex, a crypto exchange, “for operating an unregistered national securities exchange, broker and clearing agency.”

The SEC is also charging Bittrex’s foreign entity for “failing to register as a national securities exchange in connection with its operation of a single shared order book” with its parent company.

In recent weeks we’ve seen the SEC take on Coinbase and Tron, not to mention Binance taking fire from a different American government agency (the CFTC). Suffice it to say that after lagging behind the crypto market’s growth, government regulators are stepping up to the plate.

Reactions vary to the SEC’s recent actions. In the crypto community, there’s a generally held perspective that the U.S. government is being too heavy-handed in its enforcement actions; that its rules are either too vague or poorly fitting for web3-related assets and activity; and that regulators should work more closely with the industry to come up with new rules for what some consider to be a novel method of approaching the exchange of value.

The SEC disagrees. In a comment that should serve as a clear portent of future activity, the agency said that its Bittrex-related action “makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity.” If you were hoping that the SEC would relax its posture that crypto assets are more often securities — and therefore under the purview of existing regulation — this is not good news.

In the case of Bittrex, the agency points out that the crypto exchange took actions to specifically avoid SEC oversight:

Bittrex and [William] Shihara, who was the company’s CEO from 2014 to 2019, coordinated with issuers who sought to have their crypto asset made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate the crypto asset as the offering of a security. For example, in an effort to avoid regulatory scrutiny, before Bittrex would make an asset available on its platform, Bittrex and Shihara instructed issuer-applicants to delete statements related to “price prediction[s],” “expectation of profit,” and other “investment related terms.”

Bittrex was not a globally leading exchange; ranked somewhere around 40th in global volume, news of the SEC’s actions have yet to shake the crypto markets in any material sense. Still, small cuts can lead to material bloodletting, something that the web3 world can ill afford in its current downturn.