According to Cornerstone Research, since 2013, the SEC has filed 97 lawsuits against participants in the cryptocurrency industry, 20 of them occurred in 2021. The total amount of fines amounted to $2.35 billion.
According to an updated report by Cornerstone Research, last year the US Securities and Exchange Commission (SEC) filed 14 lawsuits in US federal courts and initiated 6 administrative proceedings regarding cryptocurrency projects. 70% of these enforcement actions were related to Initial Coin Offerings (ICOs). 65% of enforcement actions were taken by the SEC against firms accused of fraud under section 17(a) of the Securities Act and/or section 10(b) and rule 10b-5 of the US Exchange Act.
In 80% of cases, the regulator accused cryptocurrency projects of offering unregistered securities and violating Sections 5(a) and 5(c) of the US Securities Act; in 55% of cases, the agency charged firms with both of the above charges. Overall, since 2013, the SEC has filed 58 lawsuits and 39 administrative proceedings against cryptocurrency market participants. During this period, the agency imposed monetary fines on them totaling about $2.35 billion.
Cornerstone Research senior manager Simona Mola noted that following Gary Gensler’s accession to the SEC chair in April 2021, the agency’s key priority has been to prosecute crypto firms. This is especially pronounced in the period from late May to mid-September. For example, in September, the agency accused three firms at once of conducting unregistered ICOs, and in August, the DeFi Money Market project was closed due to SEC accusations.
Cornerstone Research Vice President Abe Chernin added that under the new administration, the SEC has not become more loyal to the cryptocurrency industry, but only continued to apply enforcement measures to it and classify digital assets as securities, guided by the Howey test. With the SEC paying close attention to the cryptocurrency space, this year the regulator will continue to put pressure on it, especially on DeFi platforms, Chernin suggested.
Recall that in December, SEC Commissioners Hester Peirce and Elad Roisman criticized Gensler’s regulatory agenda for lacking clarification on digital assets.