Figure 1a: Number of SEC Cryptocurrency Enforcement Actions by Calendar Quarter

SEC Cryptocurrency Enforcement: Q3 2021 Update

Below the Biden administration, the SEC continues to be energetic in policing the cryptocurrency house with 19 enforcement actions associated to cryptocurrency introduced within the first 9 months of 2021.

Govt Abstract

  • On April 17, 2021, Gary Gensler was sworn in because the chair of the SEC.1 Chair Gensler included crypto belongings as one of many most important areas to which he’ll direct SEC assets.2

  • Within the first 9 months of 2021, the SEC introduced 19 enforcement actions associated to cryptocurrency. Twelve had been litigated in U.S. district courts (“litigations”), and 7 had been resolved throughout the SEC as administrative proceedings (“administrative proceedings”).

  • Cryptocurrency enforcement exercise in Q1 2021 was largely according to the exercise in Q1 2020. In Q2 2021, enforcement exercise slowed down as senior positions had been crammed beneath Chair Gensler.3 It bounced again in Q3 2021, with 9 cryptocurrency enforcement actions

  • Because the first motion in July 2013, the SEC has introduced a complete of 94 cryptocurrency enforcement actions as of September 30, 2021:

    • 55 litigations

    • 39 administrative proceedings

See the Appendices >

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Variety of Cryptocurrency Enforcement Actions by SEC Fiscal Yr

Whereas the general variety of cryptocurrency-related litigations and administrative proceedings introduced by the SEC in FY 2021 barely trailed these in FY 2020, enforcement exercise picked up within the months after Chair Gensler started his tenure on the SEC and appointed his staff.

Figure 2a: Cumulative Number of SEC Cryptocurrency Litigations by SEC Fiscal Year

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Figure 2b: Cumulative Number of SEC Cryptocurrency Administration Proceedings by SEC Fiscal Year

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Kinds of Cryptocurrency Enforcement Actions

Within the first 9 months of 2021, the SEC introduced 12 litigations and 7 administrative proceedings within the cryptocurrency house.

Types of Cryptocurrency Enforcement Actions

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Allegations in Cryptocurrency Enforcement Actions

From Q1 2021 to Q3 2021, probably the most frequent allegations in SEC cryptocurrency enforcement actions continued to be fraud and unregistered securities choices.

Figure 4: Allegations in SEC Cryptocurrency Enforcement Actions by Calendar Quarter

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Allegations in Cryptocurrency Litigations versus Administrative Proceedings

From Q1 2021 to Q3 2021, 11 of the 19 cryptocurrency enforcement actions alleged fraud, whereas 14 concerned alleged an unregistered securities providing violation.

Figure 5a: Allegations of Fraud in the Offer or Sale of Securities in SEC Cryptocurrency Enforcement Actions by Calendar Quarter

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Figure 5b: Allegations of Unregistered Securities Offerings in SEC Cryptocurrency Enforcement Actions by Calendar Quarter<br />Q3 2013–Q3 2021″ src=”https://www.cornerstone.com/CornerstoneQA/media/Images/Publications/Reports/Charts/SEC%20Cryptocurrency/Ex5b_SECCrypto-2021-Q3Update.svg”></a></p>
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ICOs as Unregistered Securities Providing Allegations

From Q1 2021 to Q3 2021, the SEC continued to give attention to preliminary coin choices (ICOs). All however one of many 14 enforcement actions alleging an unregistered securities providing violation beneath Sections 5(a) and 5(c) of the Securities Act had been associated to ICOs. Greater than 60% of those ICO-related enforcement actions alleged fraudulent habits.

Figure 6: ICOs as Unregistered Securities Offering Allegations in SEC Cryptocurrency Enforcement Actions by Calendar Quarter<br />Q3 2013–Q3 2021″ src=”https://www.cornerstone.com/CornerstoneQA/media/Images/Publications/Reports/Charts/SEC%20Cryptocurrency/Ex6_SECCrypto-2021-Q3Update.svg”></a></p>
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[1] SEC, “Gary Gensler Sworn in as Member of the SEC,” Press Launch, April 17, 2021, https://www.sec.gov/news/press-release/2021-65.

[2] SEC Chair Gary Gensler, “Testimony before the Subcommittee on Financial Services and General Government, U.S. House Appropriations Committee,” Could 26, 2021, https://www.sec.gov/news/testimony/gensler-2021-05-26.

[3] See, e.g., SEC, “SEC Appoints New Jersey Attorney General Gurbir S. Grewal as Director of Enforcement,” Press Launch, June 29, 2021, https://www.sec.gov/news/press-release/2021-114

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