The U.S. Securities and Exchange Commission (SEC) saw a significant surge in crypto-related enforcement in 2023, with a 50% increase in enforcement actions compared to 2022, as detailed in a new report. The report emphasized the SEC’s continued prioritization of cryptocurrency-related enforcement, highlighting that the regulatory body brought 46 enforcement actions against various digital asset market participants in 2023.
Cornerstone Research’s recent report titled “SEC Cryptocurrency Enforcement” shed light on the SEC’s heightened focus on digital assets last year, with the number of enforcement actions reaching a new high. Specifically, the report pointed out that the 46 enforcement actions in 2023 represented a 53% increase from the prior year, with the first quarter alone seeing the highest number of actions in a single quarter.
In terms of the nature of the enforcement actions, the report revealed that the SEC initiated 26 litigations in U.S. federal courts and 20 administrative proceedings in 2023. The monetary penalties imposed for settlements reached a total of $281 million. Notably, the report also highlighted a shift in the types of enforcement actions, with a decrease in the percentage of SEC actions linked to initial coin offerings (ICOs) and an increase in actions related to non-fungible tokens (NFTs).
The report further emphasized the SEC’s commitment to robust enforcement in the crypto space, citing Chair Gensler’s acknowledgment that enforcement is a necessary tool. In 2023, the SEC brought charges against 124 individuals or entities in cryptocurrency enforcement actions, signaling a balanced approach with 54% of the enforcement actions targeting individuals and 46% representing firms. This distribution marks a notable shift from the previous year, showcasing a decrease in the percentage of enforcement actions solely targeting individuals.
Overall, the report provides valuable insights into the SEC’s escalating focus on crypto-related enforcement and the evolving landscape of digital asset regulation, offering essential information for industry professionals and market participants.
