As per a recent report from a consulting firm Cornerstone Research, the United States Securities and Exchange Commission (SEC) brought a record number of crypto-related enforcement actions last year.
As per data, figures from 2022 have been about 50% up from 2021. In 2022, SEC had about 30 crypto-related enforcement actions, close to 2020, when it brought 29 such actions. The firm stated that the most common allegations amongst these actions were fraud and unregistered securities.
Sources reveal that out of the 30 listed enforcement actions, 70% alleged fraud, 73% alleged unregistered securities, and 50% alleged both. Some of the biggest cases brought last year included the charges against a former Coinbase employer, his brother, and his friend for allegedly running an insider trading scheme and another case in December against former FTX CEO Sam Bankman-Fried allegedly defrauding investors.
Simona Mola, principal at Cornerstone Research and author of the report, said, “It seems crypto assets will likely continue to be a priority under the Gensler administration.” She also cited the 50% uptick in enforcement actions and the agency’s expansion of its “Crypto Assets and Cyber Unit” as examples of the same.
Mola also revealed a surprising finding in the research that there was an increase in assistance that the agency received from outside agencies and organizations in 56 actions. As per the report, out of the total 127 enforcement actions executed from 2013 to 2022, the agency received assistance from outside agencies and organizations in 56 actions.
The researcher counted this increasing assistance as a sign of increasing complexity, along with other conclusions. She said:
“Under the Gensler administration, the SEC has been increasingly assisted by multiple international authorities in its cryptocurrency enforcement actions, which is likely a byproduct of the number of U.S. agencies regulating the space in addition to the SEC, but also a byproduct of the increasing complexity of certain cases that often transcend the national borders.”
The SEC and its chair have appeared rigid towards the digital assets sector. While there has been ongoing strife in the U.S. regarding regulating crypto assets as commodities or securities, the lawmakers seemed to be on the Commodity Futures Trading Commission (CFTC) side. Todayq News reported in August that three proposals had already been presented in Congress to make the CFTC the primary regulator for cryptocurrency spot markets.
However, Gary Gensler, the organization’s chairman, first said that only Bitcoin is a commodity whereas the other cryptocurrencies had characteristics of securities. In September last year, he elaborated on how the majority of Ethereum nodes are present in the U.S. and hence the asset must be regulated under SEC.