The Securities and Exchange Commission (SEC) initiated 46 enforcement actions against cryptocurrency companies in 2023, a figure more than double the number of cases reported in 2021. According to a report from litigation consulting firm Cornerstone Research on January 24, the SEC is on track to record the highest number of cryptocurrency-related enforcement cases in 2023 since 2013, indicating that digital assets have become a "top priority" for the regulatory body. The report reveals that across these 46 enforcement actions in 2023, the SEC imposed $281 million in settled fines, and the number of administrative proceedings tripled compared to 2022.
The report from Cornerstone Research suggests that SEC Chair Gary Gensler considers enforcement as a tool rather than a destination. The number of SEC enforcement actions in the cryptocurrency space has witnessed a steady increase over the past two years under Gensler's leadership. In 2021, when Gensler was approved to serve as Commission Chair, there were 20 SEC enforcement actions involving lawsuits or administrative proceedings. The actions against cryptocurrencies increased by 50% in 2022 and surged by more than 53% in 2023.
The SEC's cryptocurrency-related enforcement actions in 2023 encompass two cases targeting non-fungible tokens (NFTs) and several cases related to initial coin offerings (ICOs). Cornerstone Research notes that approximately half of the 108 lawsuits filed since 2013 have been resolved in court. Several cases against major cryptocurrency exchanges, including Binance, Coinbase, Terraform Labs, Ripple, and Kraken, are still pending as of the report's publication. Gensler has faced criticism from the crypto community for adopting a mandatory regulatory approach to digital assets without providing a clear framework for U.S. companies. Coinbase, for example, claimed it had met with SEC officials over 30 times in "nine months" before the regulatory action without receiving any feedback.
Despite the growing number of enforcement actions, the SEC recently approved the listing of a spot Bitcoin exchange-traded fund (ETF). The ETF debuted on January 10, and Gensler, who cast the decisive vote on the ETF ruling, clarified in a statement that the committee did not approve or endorse Bitcoin.
