The US Securities and Exchange Commission has been one of the primary regulators for cryptocurrency projects for the past seven years, receiving fines of $ 1.77 billion.
According to a report published yesterday by Cornerstone research, The SEC took 75 enforcement actions against cryptocurrency companies and individuals from July 1, 2013 to December 31, 2020. primarily in connection with allegations of fraud or unregistered securities offers. Many of the lawsuits were tried in US district courts, including the southern borough of New York, while others were settled within the commission as administrative proceedings. Both of these often resulted in fines.
“For the past seven years, the SEC has established itself as one of the primary regulators overseeing the cryptocurrency space.” He said Simona Mola, Author of the report. “In early March of this year, the SEC passed more than 70% of the enforcement actions for fines totaling more than $ 1.77 billion.”
Of the 75 enforcement actions, the SEC resolved 43 cases through litigation and 32 through administrative proceedings. In addition, the regulatory authority has issued 19 Commands for Stopping Operation over the same seven-year period, 11 of which were issued by the SEC from Q2 2017 to Q1 2018 as part of the ICO madness.
Aside from the stop orders, the report finds that more than half of the enforcement actions (39 cases) related to allegedly unregistered security offers focused on initial coin offers. Since the 1940s, the SEC has used the Howey test to determine whether certain assets qualify as “investment contracts” and qualify as securities. Many consider the SEC’s 2017 DAO report (which stated that digital assets could meet this standard) as one of the most important moments for cryptocurrency regulation in the US.
Cornerstone Research Vice President, Abe Chernin pointed out that the changing landscape in the cryptocurrency space, as well as the management of Biden, could lead to fewer cases of suspected fraud and instead clarify a legal framework for cryptocurrencies. In April, lawmakers confirmed Gary Gensler as the new SEC chairman, and Janet Yellen has already assumed the office of Treasury Secretary.
“ICOs have been a frequent target of SEC enforcement actions, but that may change as issuers explore other potential sources of funding. […] While the SEC will continue to focus on fraud, there is growing expectation that the new administration will develop a clearer regulatory approach and seek greater cross-agency coordination to encourage innovation in cryptocurrency markets. “