“There were a lot of entrepreneurs that grew up in this field and chose to be noncompliant,” Mr. Gensler said in an interview last month at the S.E.C. headquarters in Washington. “We will be a cop on the beat.”

Mr. Gensler’s central claim is simple: For all their novel attributes, most cryptocurrencies are securities, like stocks or other investment products. That means the developers who issue cryptocurrencies must register with the U.S. government and disclose information about their plans. In Mr. Gensler’s view, exchanges like Coinbase and FTX, where customers buy and sell digital coins, should also have to obtain S.E.C. licenses, which come with increased legal scrutiny and disclosure obligations.

The crypto industry has fought the government’s efforts to classify digital assets as securities, arguing that the legal requirements are overly burdensome. Even before FTX’s collapse, the debate was reaching an inflection point: A federal judge is expected to rule in the coming months in a lawsuit brought by the S.E.C. that charges the cryptocurrency issuer Ripple with offering unregistered securities. A victory for the government would strengthen Mr. Gensler’s hand, establishing a precedent that could pave the way for more lawsuits against crypto companies.

Eoin Treacy's view

The tech sector has an aspiration to “move fast and break things”. In practice that means ignoring regulations until sufficient scale has been achieved to shape them. For example, that is exactly what Uber did in ignoring taxi laws. China’s ANT Financial was allowed to prosper in a very grey area of banking regulation until it was eventually neutered by the government.

One of the primary reasons cryptocurrencies have been so successful is because they are totally unregulated. That means there are no checks and balances. It is reasonable to conclude most projects would cease to exist if the sector were subjected to the same scrutiny as the stock market.