The Securities and Exchange Commission (SEC) is celebrating “another highly productive and impactful year” cracking down on the crypto sector. In its 2022/23 fiscal year report, the SEC highlights its work in tackling various individuals and crypto projects, from Kim Kardashian to FTX, which collectively resulted in almost $5 billion worth of enforcement. Surprisingly, the agency fails to mention its defeats to Ripple and Grayscale, or the fact that it is being practically forced to launch a Bitcoin ETF by the courts. These omissions are quite interesting, aren’t they?
From Crypto Exchanges to NFTs
In its report, the SEC highlights how its enforcement division has cracked down on various aspects of the crypto asset securities domain. This includes billion-dollar frauds, unregistered offerings, and illicit celebrity endorsements. Notable investigations resulted in litigated charges against prominent figures such as Terraform Labs, Richard Heart, and FTX CEO Samuel Bankman-Fried.
The scrutiny also extended to non-compliance with registration provisions, leading to charges against firms like Genesis/Gemini, Celsius, Kraken, and Nexo. Settlements were reached, involving substantial penalties, with Kraken agreeing to pay $30 million and Nexo settling for a $22.5 million civil penalty.
The SEC also celebrated its clampdown on the NFT sector, filing actions against issuers such as Impact Theory and Stoner Cats 2 for conducting illegal unregistered offerings of crypto asset securities in NFT form.
SEC Forgets About Ripple and Grayscale
The enforcement focus also encompassed the crypto asset intermediary space, with actions taken against platforms like Beaxy, Bittrex, Binance, and Coinbase, addressing alleged rampant noncompliance. The SEC’s cases against the latter may come to trial next year, but 2025 is more likely.
The SEC famously intervened in cases involving influencers who illicitly endorsed crypto asset securities without disclosing compensation. Personalities like Paul Pierce and Kim Kardashian settled charges by agreeing to pay civil penalties, disgorgement, and prejudgment interest. SEC Chair Gary Gensler even rushed to a TV studio to be interviewed about the Kim Kardashian affair moments after the news broke. Interestingly, the SEC’s report fails to mention its defeat to Ripple over its classification of XRP as a security or the ruling of Judge Neomi Rao that the agency’s dismissal of Grayscale’s Bitcoin ETF application was “arbitrary and capricious.”
Quite odd, it seems like they missed the deadline to include those details.
Photo: Freepik.com
