The United States Securities and Exchange Commission (SEC) has announced a notable increase in its actions related to cryptocurrency during the fiscal year 2023. In a recent press release, the SEC revealed a notable 8% increase in enforcement actions, totaling 784 cases and resulting in financial remediation orders approaching nearly $5 billion.
A comprehensive approach to Cryptocurrency regulation
This surge in activity highlights the SEC’s intensified focus on the rapidly-evolving cryptocurrency industry. The regulatory body has been actively addressing a range of issues, from fraudulent activities to dealings that weren’t properly registered, as detailed in the SEC’s official statement.
The SEC’s enforcement efforts addressed various aspects of the crypto industry, encompassing billion-dollar frauds, unregistered offerings, and illicit activities by market influencers. Notable cases involved major players such as Terraform Labs, FTX CEO Samuel Bankman-Fried, and celebrities like Paul Pierce and Kim Kardashian.
Crackdown on unregistered offerings
One of the key initiatives was the crackdown on unregistered offerings, targeting platforms such as Kraken and Nexo. Both entities agreed to cease their unregistered offerings, with Kraken settling for a significant $30 million and Nexo agreeing to a $22.5 million civil penalty.
SEC’s actions against NFT issuers
In a first for the SEC, actions were taken against issuers of non-fungible tokens (NFTs). Impact Theory LLC and Stoner Cats 2 LLC faced charges for conducting illegal unregistered offerings of crypto asset securities disguised as NFTs.
Regulatory scrutiny on Crypto exchanges and intermediaries
The enforcement actions also extended to crypto exchanges, including Beaxy, Bittrex, Binance, and Coinbase. The SEC addressed alleged noncompliance issues within the crypto intermediary space, highlighting inherent conflicts of interest and risks for investors.
The SEC’s focus on crypto influencers revealed a series of cases where celebrities unlawfully praised crypto assets without disclosing compensation, including NBA Hall of Famer Paul Pierce and media personality Kim Kardashian. Several celebrities, including Lindsay Lohan, Jake Paul, and Akon, faced charges for illegal crypto asset promotion.
Notably, fiscal year 2023 witnessed a surge in whistleblower activity, with the SEC receiving a record-breaking 18,000 whistleblower tips. The Whistleblower Program also saw awards totaling nearly $600 million, the highest ever awarded in a single year.
As the crypto landscape continues to evolve, the SEC’s robust enforcement actions highlight its commitment to safeguarding investors and maintaining market integrity. The regulatory body remains vigilant in addressing fraud, unregistered offerings, and other illicit activities within the crypto space, signaling a proactive stance in adapting to the dynamic crypto environment.