An economic consulting firm recently issued a report on SEC cryptocurrency enforcement from July 1, 2013, to Dec. 31, 2020. According to the report, in that time period, the SEC brought 75 cryptocurrency-related enforcement actions along with a number of subpoenas and follow-on administrative orders. Defendants and respondents included cryptocurrency issuers, brokers, exchanges and other service providers. Highlights of the report include:
- Of the 75 enforcement actions, 43 were litigated in U.S. district courts (litigations) and 32 were resolved within the SEC as administrative proceedings.
- The SEC has issued 19 trading suspension orders.
- In 34 of the 43 litigations, the defendants were a mix of individuals and firms; in seven actions, the defendants were individuals only; and in two actions, the defendants were firms only.
- The most common allegations over the study period involved fraud (52 percent) and unregistered securities offerings (69 percent).
- Twenty-eight actions (37 percent) contained allegations of both fraud and unregistered securities offerings, and more than half of all enforcement actions alleged unregistered securities offering violations related to initial coin offerings, or ICOs.
- The SEC also alleged failures to register as broker-dealers or exchanges and promotion of securities without disclosing compensation.
- Less frequent allegations included violations of unregistered offerings of swaps to noneligible contract participants.
- In litigations, the median time for complaint filing to case resolution was 305 days, and average time was 343 days.
- SEC v. Telegram Group Inc. et al., SEC v. Haddow et al. and SEC v. Shavers et al. were some of the actions resolved with multimillion-dollar remedies in terms of disgorgement and/or civil penalties.
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