“The crypto markets have seen enormous expansion but also severe misconduct,” Gary Gensler believes.
There is a lot of talk about the Securities and Exchange Commission (SEC) possibly approving a Bitcoin spot ETF. Today, the SEC gave itself a report card of sorts by saying that it had a “highly successful and impactful year” when it came to enforcing laws related to digital assets and cryptocurrencies.
Gurbir S. Grewal, director of the SEC enforcement division, stated in the report, “Increasing public confidence in our markets and safeguarding investors’ interests require us to act with urgency and employ every resource at our disposal.”
More than two dozen crypto asset and digital asset security enforcement proceedings were filed with the SEC in 2023. This was a huge jump from previous years and evidence of the SEC’s newfound interest in crypto regulation.
Gary Gensler, the chair of the SEC, said that the organization was like “a cop on the beat… pursuing the facts and the law wherever they lead to hold lawbreakers accountable.”
Written statements provided by SEC Chair Gary Gensler in advance of Tuesday’s hearing on SEC supervision reveal his severe views on crypto haven’t softened despite widespread criticism. Because of widespread noncompliance with securities rules, he stated, “it’s not surprising that we’ve seen many problems in this industry.” To paraphrase, “It’s like the 1920s, before federal securities laws were enacted.”
The SEC brought accusations against many key crypto businesses and individuals for alleged fraud and failing to register crypto asset offers and exchanges. In these seminal trials, prominent figures including FTX’s Samuel Bankman-Fried and Terraform Labs’ Do Kwon faced allegations of cheating investors out of billions of dollars.
The government also filed charges against Celsius, Kraken, Genesis, Gemini, and Nexo, all of which deal in cryptocurrency. Kraken paid a $30 million civil penalty and Nexo a $22.5 million civil penalty.
This year, the SEC went after bad actors in the NFT market by filing charges against Impact Theory LLC and Stoner Cats 2 LLC for making unregistered offers of crypto asset securities.
The SEC looked into many high-profile celebrities who had backed cryptocurrency initiatives that year. The government filed charges against Kim Kardashian and others for promoting cryptocurrency without declaring any financial gain. Kardashian agreed to pay $1.26 million to resolve the accusations.