The SEC Reveals Increase in Enforcement Actions in FY2023
According to the most up-to-date report from the United States Securities and Exchange Commission (SEC), the number of enforcement actions filed in the fiscal year 2023 (FY2023) increased by 3 percent from the previous year, setting a new record.
A lot of these enforcement actions involved major players in the cryptocurrency industry, with numerous states against digital currency enterprises and executives ranging from fraud to securities violations.
Nearly $1 Billion Distributed to Harmed Investors
The SEC’s enforcement actions in FY 2023 rose to 784 from 760 over the past fiscal year, with the Commission obtaining $4,949 Billion in financial remedies. A major portion of this amount, approximately $3.4 billion, comprised disgorgement and prejudgment interest, while civil penalties were valued at $1,580 billion.
The SEC likewise revealed that the financial remedies ordered in FY 2023 were the Second highest in the agency’s history. In addition, the Commission distributed $930 Million to influenced investors, marking the Second consecutive year that the agency has distributed over $900 Million in such cases. Whistleblower awards likewise increased during this period to $600 Million. One individual received about $279 Million, the largest reward granted.
SEC Went Hard on the Cryptocurrency Industry in FY 2023
As part of its enforcement efforts, the SEC filed charges against plenty of top digital currency entities and individuals, alleging fraud, securities violations, and unregistered operations. High-profile cases included FTX founder Sam Bankman-Fried, Terraform Labs and its founder Do Kwon, Richard Heart and his entities Hex, PulseChain, and PulseX, Kraken, Celsius, and Nexo.
The SEC likewise filed lawsuits against industry giants Binance and its CEO Changpeng Zhao, along with Coinbase, and mentioned cases of unlawful touting of digital currency asset securities by celebrities who did not disclose payment for their promotions. It’s worth noting that absent from the SEC report was the regulator’s initial loss in its court case against Ripple, where the judge ruled that secondary sales of XRP did not constitute an offer of investment contracts or securities.
Hot Take: The SEC Ramps Up Enforcement Against the Cryptocurrency Industry
The report from the SEC indicates an increase in enforcement actions in FY2023, with heavy scrutiny on the cryptocurrency industry and a whole lot of rise in financial remedies, demonstrating the SEC’s commitment to tackling unlawful activities and ensuring investor protection within the digital asset space.
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