According to a report released by Cornerstone Research on January 19, since 2013, the US Securities and Exchange Commission (SEC) has issued a total of approximately $2.35 billion in fines to participants in the digital asset market.
The report, “U.S. SEC Cryptocurrency Enforcement: 2021 Update,” found that between 2013 and the end of 2021, the U.S. SEC took a total of 97 enforcement actions worth $2.35 billion.
Of the 97 total actions, 58 were class actions and the remaining 39 were administrative actions. Of the 2.35 billion yuan raised through litigation, 1.71 billion yuan came from litigation and 640 million yuan came from administrative litigation.
Allegations in US SEC cryptocurrency lawsuit Source: Cornerstone Research
Most of those charged were "corporate respondents," accounting for $1.86 billion of the $2.35 billion total. Meanwhile, the remaining $490 million came from individual responders.
Although the U.S. SEC fined cryptocurrency players for the first time in July 2013, the report noted that lawsuits initiated by the U.S. SEC in the field of encryption did not begin to increase until 2017. Between 2013 and 2017, there were only six crypto cases initiated by the US SEC.
The agency initiated 20 of the 97 lawsuits in 2021 -- 14 acts of action and six administrative actions in U.S. federal courts. Of a total of 20 enforcement actions, 70 percent were related to initial coin offerings (ICOs). The report states:
“Of the 20 enforcement actions initiated in 2021, 65% allege fraud, 80% allege unregistered securities offering violations, and 55% allege both.”
The author of the report, Simona Mola, wrote in a statement that the recent US SEC crackdown on cryptocurrencies may be related to the appointment of US SEC Chairman Gary Gensler in April 2021, noting that the US SEC has been in the midst of late May to mid-September. "Significantly increased" enforcement efforts.
“The US SEC took some of the first actions against crypto lending platforms, unregistered digital asset exchanges, and decentralized finance (DeFi) lenders. It also imposed what we saw in ICO-related enforcement actions following Telegram. One of the biggest fines ever seen," she wrote.
Abe Chernin, vice president at Cornerstone Research, said we can expect these drastic measures to continue into the new year.
“In 2022 we may see further scrutiny of some market players, such as DeFi platforms, given the continued focus of the US SEC on this space.”
During the last week of December 2021, Gensler added a new employee, Corey Frayer, to help advise the agency on its regulation of cryptocurrencies. Prior to this, there was news that Elad Roisman would resign as a member of the US SEC board of directors.
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