Regulators Seek Crypto Blood, They Break Annual Record With 58 Lawsuits

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Over the past year, many have claimed that the crypto industry is under attack from US regulators and recent data confirms this perception. Agencies there have shattered all previous records, since 2013, in terms of lawsuits against companies in the nascent space.

According to data shared by Solidus Labs, the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Financial Crimes Enforcement Network (FinCEN) have taken a total of 58 enforcement actions against crypto projects.

Source: Solidus LabsCrypto vs. USA, a new normal?

As the chart above shows, these 58 lawsuits are the highest in nearly a decade. They represent an increase of 65% from 2021 and around 60% from 2020.

The SEC has been the biggest naysayer to cryptos over the past decade. In 2022, the Commission announced 30 actions against projects and companies in the sector. The agency appears to operate on a regulation-by-law enforcement approach to the detriment of infant industry.

The SEC has opened and won lawsuits against peer-to-peer digital marketplace LBRY and payment company Ripple, to name a few. The latest of these cases is still ongoing as the Commission attempts to gain more jurisdiction over the digital asset industry.

The SEC is not the only US regulator after crypto projects. The CFTC ramped up its legal actions against the industry and registered 19 cases in 2022. This represents a 73% increase from its peak in 2021, suggesting an upward trend in legal actions against the industry. nascent industry.

FinCEN saw a slight increase, but its action against Ethereum (DEX)-based decentralized exchange Tornado Cash had a significant impact. The agency added the protocol to its list of sanctioned entities crossing a line between companies/individuals and technologies. The repercussions of these sanctions continue to ripple through the industry.

BTC trends up on the daily chart. Source: BTCUSDT TradingviewWhich agency has hit crypto the hardest?

The spike in regulations against crypto originated from the collapse of major entities in the space. In 2022, the Terra ecosystem (formerly LUNA) collapsed, leading to the bankruptcy of several companies, including the hedge fund Three Arrows Capital (3AC).

Later, the collapse of crypto exchange FTX and the embezzlement of billions of customer deposits seems to have sent another message to regulators. In the United States, federal and state agencies joined forces to retaliate against the fledgling industry.

Against this backdrop, regulators have captured over $3.5 billion in fines. According to the report, the SEC and CFTC issued most of these sanctions. The graph below shows that the SEC has imposed over $2 billion in fines from 2013 to 2022.

Source: Solidus Laboratories

As of this writing, Bitcoin (BTC) is trading at $23,100 with sideways movement in the past 24 hours.

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