A report from Cornerstone Research shows that the SEC obtained settlements totaling $281 million last year, with nearly $80 million resulting from a single case.
According to a detailed report published yesterday (January 24) by Cornerstone ResearchUnited State Securities and Exchange Commission The SEC has significantly increased the volume of enforcement actions against cryptocurrency companies under the leadership of… Gary Genslerreaching a 10-year high in 2023, when the SEC filed 46 enforcement actions against cryptocurrency companies, more than double the number of cases in 2021 and about a quarter of all such actions filed since 2013, when the The first such case.
Since that first case in 2013, the number of cryptocurrency-related actions has reached 173, including 108 lawsuits and 65 administrative actions, resulting in financial penalties totaling approximately US$2.89 billion. Of the total $281 million in settlements, the largest settlements imposed in 2023 were $79.5 million collected in 2023. SEC v. Barksdale et al.: In that case, siblings John and Tina Barksdale were accused of raising tens of millions of dollars through fraudulent offerings of unregistered securities tied to a cryptocurrency called Ormeus Coin.
The SEC alleged that between June 2017 and April 2018, the Barksdale family, through a multi-level marketing business — or “pyramid scheme” — called Ormeus Global, offered and sold subscription packages that included Ormeus Coin. To promote these shows, John Barksdale is said to have conducted promotional tours globally, while his sister Tina was responsible for creating promotional materials including social media posts, online videos and press releases. The siblings were also held accountable for making false statements in investor communications, including unsubstantiated claims that Ormeus Coin was backed by a US$250 million cryptocurrency asset mining operation, which generated monthly revenues between US$5.4 million and US$8 million.
The number of SEC enforcement actions consisting of lawsuits or administrative actions reached 20 in 2021, the year the U.S. Senate confirmed Gensler's nomination as chair of the commission. Under Gensler's supervision, cryptocurrency-related actions have increased by 50% in 2022 and by more than 53% in 2023: whether this is the result of a tougher approach or simply a reflection of the growth of the cryptocurrency sector is a matter of conjecture, but it seems fair to conclude that both The workers played their role. However, the proportion of enforcement actions against individuals (as opposed to corporate entities) decreased from 50% in 2022 to 39% in 2023.
As expected, fraud and unregistered securities topped the list of allegations: Of the 46 lawsuits filed over the year, 57% alleged fraud, 63% related to unregistered securities, and 37% claimed both.
There have been a couple of cases against non-fungible tokens (NFTs) and several of them are related to initial coin offerings. Nearly half of the 108 cases filed since 2013 have been resolved in court, with cases against major exchanges, including… Binance, Coinbase, Terraform Labs, ripple And A mythical sea monster currently underway.
Gensler has faced criticism from many in the cryptocurrency space for its approach to regulation through enforcement of digital assets, with critics noting that it is difficult to comply without a clear framework for companies to follow. However, report author Simona Molla, herself a former assistant director and senior policy advisor, added that “Chairman Gensler has noted that ‘enforcement is a tool, not the destination,’” and the number of enforcement actions taken by the SEC in the cryptocurrency space has risen. During the past two years.” Foundation stone Vice Chairman Abe Chernin added: “The SEC has increasingly focused on trading platforms for cryptocurrency and mortgage lending programs or for alleged failure to register as an exchange, broker-dealer, or clearing agency.”
Despite a growing number of enforcement actions, on January 10, for the first time, the SEC approved the listing of shares of bitcoin spot (BTC) exchange-traded funds, a decision that angered the veteran Democratic senator. Elizabeth Warren. Gensler, who cast the deciding vote on the ETF ruling, issued a statement the same day saying the committee “neither approved nor endorsed Bitcoin.”
