The United States Securities and Exchange Commission (SEC) said it increased its enforcement efforts in the crypto industry in 2022, and thus recorded a 50% rise in crypto enforcement actions from 2021.
A report from Cornerstone Research revealed that the SEC issued a total number of 30 crypto-related enforcement actions against 79 defendants, which represents about a quarter of the total 127 actions that have been recorded so far since the SEC issued the first of such actions in 2013.
The report highlighted that almost half of the 30 actions issued in 2022 were related to Initial Coin Offerings (ICO). A majority of these ICO-related enforcement actions, also include allegations of fraud. The total fund lost to these actions were valued at $2.61 billion since 2013, including $242 million in 2022.
Furthermore, the report revealed that the most frequent actions in 2022 were related to allegations of fraud and unregistered securities offerings. According to the analysis, 70% of the 30 actions were based on alleged fraud, 73% were for alleged unregistered securities, and 50% contained both allegations.
While the SEC’s crypto regulatory efforts in 2022 aim to ensure safety in the crypto space, the SEC has also acknowledged assistance from other agencies, stating that support from international authorities and organizations has increased significantly under the new SEC Chairperson, Gary Gensler.
Efforts made by SEC to Protect Crypto Investors
Since the inception of the agency, the SEC has continually strived to ensure that investors are protected by ensuring that the securities markets are fair and transparent for them to invest in.
In December, shortly after the fallout of the defunct FTX platform, which led to investors losing billions of dollars in funds, the SEC announced that it would intensify its efforts to probe the proof-of-reports being published by exchanges.
Paul Munter, Acting Chief Accountant to the U.S. SEC stated that the agency is concerned that investors may be relying on information that may be false. He emphasized that the SEC is broadening its understanding of cryptocurrency transactions and that any potential gray areas will be identified and reported to the appropriate law enforcement agencies.
Similarly, the Bahamian SEC has seized about $3.5 billion worth of crypto assets belonging to FTX investors. The agency said the assets will remain in its custody before they are handed over to the investors.
