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The Supreme Court restricts the SEC’s power to fine cryptocurrency companies

June 24, 2020

The U.S. Securities Market Commission (SEC) has new regulatory restrictions when it comes to fining the accused. The ruling would have changed the requested fines in some notable cryptocurrency-related cases.

According to a summary by the United States Supreme Court on June 23, Liu v. SEC in the National Law Review, The court ruled that the SEC cannot impose fines called disruptions that outweigh the benefits of illegal activity. In addition, such sanctions can only be granted “for the benefit of the victims” and not as punitive damages.

The ruling applies to all of the accused, of course, but for blockchain and cryptocurrency companies that may face SEC fees, it is actually a stricter definition of “punishment must match crime” when it comes to financial sanctions. The commission is limited in its application by a five-year limitation period.

Large fines imposed by the SEC

The Supreme Court restricts the SEC’s power to fine cryptocurrency companiesThe Supreme Court restricts the SEC’s power to fine cryptocurrency companies

The SEC’s case against cryptocurrency company BitClave included $ 3.8 million in interest and additional penalties. Similarly, Cointelegraph reported in April that the SEC accused an expander and his wife of stealing $ 500,000.Part of it was obtained through a fake cryptocurrency offering supported by a bottled water company.

Then, The SEC imposed fines that met all unlawful profits plus interest and civil penalties, a sum that would have slightly exceeded the original amount the couple allegedly stole.

However, according to the recent decision, the SEC would impose a maximum fine of $ 500,000.They could only be used to pay those who were allegedly cheated by the two.

AND If the couple had used part of the money to provide the water on offer, the funds spent would have to be deducted from the total amount if the SEC calculates the appropriate fine.

As one of the largest financial regulators in the United States The SEC actively combats fraudulent activities related to blockchain and digital assets.