SEC Crypto Enforcement Surges in 2023
A new report by Cornerstone Research reveals that the U.S. Securities and Exchange Commission (SEC) significantly increased its enforcement actions in the cryptocurrency space in 2023, with a 53% rise compared to the previous year.
SEC Keeps Crypto a Top Priority
The SEC remains committed to prioritizing crypto-related enforcement, as evidenced by the 46 enforcement actions initiated against various participants in the digital asset market.
Record Number of Enforcement Actions
The report highlights that the SEC brought 20 enforcement actions in the first quarter of 2023, the highest number in a single quarter. In total, there were 26 litigations in federal courts and 20 administrative proceedings throughout the year.
Decrease in ICO-Related Actions
While initial coin offerings (ICOs) still accounted for 37% of the SEC’s enforcement actions, it is a decrease from the previous year. The majority of ICO-related actions involved allegations of fraud. The SEC also initiated administrative proceedings concerning non-fungible tokens (NFTs) for the first time.
Chair Gensler Highlights Importance of Enforcement
SEC Chair Gary Gensler has emphasized that enforcement is a crucial tool. The number of enforcement actions in the crypto space has increased significantly in recent years.
Focus on Individuals and Firms
Out of the 124 individuals or entities that faced charges in crypto enforcement actions, 54% were individuals and 46% were firms. Notably, there was a decrease in the percentage of actions solely targeting individuals.
Hot Take: SEC Intensifies Crypto Enforcement with Record Actions
The SEC’s relentless focus on cryptocurrency-related enforcement continues to grow, with 2023 seeing a significant surge in actions. This unprecedented increase indicates a strong commitment to regulating the digital asset market and combating fraud. As the crypto industry expands and evolves, the SEC’s proactive enforcement approach is crucial for establishing investor protection and market integrity. Traders and investors must be aware of the heightened scrutiny and the potential consequences of non-compliance. Compliance with regulations remains paramount to mitigate legal risks and contribute to the development of a responsible and sustainable crypto ecosystem.
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