An economic consultancy firm recently released a report on the SEC’s enforcement of cryptocurrency from July 1, 2013 to December 31, 2020. According to the report, during this period, the SEC filed 75 enforcement actions. cryptocurrency-related as well as a number of subpoenas. and administrative follow-up orders. Defendants and defendants included cryptocurrency issuers, brokers, exchanges and other service providers. Highlights of the report include:
- Of the 75 enforcement actions, 43 were initiated in U.S. district courts (litigation) and 32 were resolved in the SEC as administrative proceedings.
- The SEC has issued 19 stop trading orders.
- In 34 of the 43 cases, the defendants were a mixture of individuals and businesses; in seven actions the defendants were only individuals; and in two actions the defendants were only companies.
- The most common allegations during the study period concerned fraud (52%) and unregistered securities offerings (69%).
- Twenty-eight actions (37%) contained allegations of fraud and unregistered securities offerings, and more than half of all enforcement actions alleged violations of the unregistered securities offer related to initial coin offerings of currency, or ICO.
- The SEC also alleged failures to register as brokers or stock exchanges and promote securities without disclosing compensation.
- Less frequent allegations included violations of unsecured offers of swaps to ineligible participants in the contract.
- In litigation, the median time to file a complaint for settlement was 305 days and the average time was 343 days.
- SEC c. Telegram Group Inc. et al., SEC c. Haddow et al. and SEC c. Shavers et al. Some of the actions were resolved with multi-million dollar remedies in terms of restitution and / or civil penalties.
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