The U.S. Securities and Exchange Commission (SEC) has intensified its regulatory crackdown on the cryptocurrency industry. According to Cornerstone Research’s latest report, “SEC Cryptocurrency Enforcement: 2021 Update,” the agency has brought a total of 97 enforcement actions against digital asset market participants as of December 31, 2021, imposing approximately $2.35 billion in total monetary penalties.
Breakdown of Enforcement Actions
The report details that of the 97 actions, 58 were cryptocurrency-related litigations and 39 were administrative proceedings. Nearly half of the litigations originated in New York State. As of January 3, 2022, 31 litigations had reached a resolution. Additionally, the SEC issued 10 delinquent filing orders, 20 trading suspension orders, and numerous subpoenas and follow-on administrative proceedings.
Since the first enforcement action in July 2013, the pace of SEC actions has accelerated significantly, particularly after Gary Gensler was sworn in as SEC Chairman on April 17, 2021. Under his leadership, cryptocurrency enforcement has become a top priority for the agency.
Gensler Calls for Platform Regulation
The report notes that the SEC’s enforcement activity under the new administration has continued to focus on crypto-related actions. Gensler has repeatedly stressed that crypto trading platforms must be regulated to ensure investor protection. In December 2021, he added a crypto adviser to his executive staff.
Meanwhile, the North American Securities Administrators Association (NASAA) and state regulators recently stated that “investments related to cryptocurrencies and digital assets is our top investor threat … by far.”
With enforcement actions mounting, market participants expect the SEC to issue further guidance and penalties in 2022, particularly targeting unregistered securities offerings and decentralized finance (DeFi) projects.