SEC Ramps Up Crackdown: 46 Crypto Firms Hit in 2023

• SEC crypto enforcement actions against firms surged to 46 in 2023 under Chair Gary Gensler, more than double 2021 and the highest since 2013.
• Major exchange cases against Binance, Coinbase, Terraform Labs, Ripple, and Kraken remain ongoing amid criticism of regulation by enforcement approach.
• Despite ramping up enforcement, the SEC approved Bitcoin spot ETFs for the first time in January 2023, though it did not endorse or approve Bitcoin itself.

The U.S. Securities and Exchange Commission (SEC) has significantly ramped up cryptocurrency-related enforcement cases under Chair Gary Gensler. This suggests digital assets are a top priority for the regulator.

SEC Enforcement Actions Against Crypto Firms Surge Under Gensler

According to a report from Cornerstone Research, the SEC brought 46 enforcement actions against crypto firms in 2023, more than double the number in 2021. This marks the highest level since 2013. The SEC imposed $281 million in monetary penalties from settlements and tripled administrative proceedings compared to 2022.

“Chair Gensler has noted that enforcement is a tool, not the destination, and the number of SEC enforcement actions brought in the crypto space has ramped up over the last two years,” said Cornerstone’s Simona Mola, the report’s author.

The number of SEC enforcement actions was 20 in 2021 when Gensler’s nomination was confirmed. Under Gensler, actions increased 50% in 2022 and over 53% in 2023.

Among Actions in 2023 Are NFT and ICO Cases

The SEC’s crypto cases in 2023 included two involving non-fungible tokens (NFTs) and several related to initial coin offerings (ICOs). Roughly half of the 108 litigation cases since 2013 have been resolved in court. Major exchange cases against Binance, Coinbase, Terraform Labs, Ripple, and Kraken remain ongoing.

Criticism of Regulation by Enforcement Approach

Gensler has faced criticism for taking a regulation by enforcement approach without clear crypto framework. Before the SEC’s action against Coinbase, the exchange claimed it met with officials over 30 times in 9 months without feedback.

Despite Increasing Actions, SEC Approved Bitcoin ETFs

Despite ramping up enforcement actions, the SEC approved Bitcoin spot exchange-traded funds in January 2023 for the first time. The same day, Gensler released a statement saying the SEC did not endorse or approve Bitcoin itself.

Conclusion

The SEC under Gensler has made crypto enforcement a top priority, as evidenced by the surge in cases. However, major exchange cases remain ongoing and the approval of Bitcoin ETFs shows the regulator’s stance is still evolving. More actions are likely in 2023 even as the crypto regulatory landscape continues to develop.