This is an excerpt from SEC Cryptocurrency Enforcement: 2023 Update.
Cryptocurrency enforcement continues to be a high priority for the U.S. Securities and Exchange Commission (SEC). In 2023, the SEC administration under Chair Gary Gensler brought a total of 46 cryptocurrency-related enforcement actions, up 53% from 2022.
The number of cryptocurrency-related enforcement actions brought in 2023 represents a new record high since the first of such actions was brought in July 2013.
As of year-end 2023, monetary penalties against digital-asset market participants totaled approximately $2.89 billion, of which $281 million were settlements reached in 2023.
- In calendar year 2023, the SEC brought 46 enforcement actions related to cryptocurrency against 124 defendants or respondents.
- Of these actions, 26 were litigated in U.S. district courts (“litigations”) and 20 were resolved within the SEC as administrative proceedings under Section 8A of the Securities Act, Section 21C of the Exchange Act, and/or Section 203(e) and 203(k) of the Investment Advisers Act (“administrative proceedings,” and together with litigations, “enforcement actions”). The SEC also issued one delinquent filing order and one follow-on action.
- The most frequent allegations continued to be fraud and unregistered securities offerings. Of the 46 enforcement actions brought in 2023, 57% alleged fraud, 61% alleged an unregistered securities offering violation, and 37% alleged both.
- Approximately 37% of the 46 enforcement actions were related to initial coin offerings (ICOs). In 2023, for the first time, the SEC also brought two actions related to non-fungible tokens (NFTs).
- In 2023, the SEC increasingly received assistance from outside organizations, especially state agencies and other state organizations, in bringing cryptocurrency enforcement actions.
In 2023, the SEC ramped up its enforcement efforts in the cryptocurrency space to a record high.
- The proportion of enforcement actions charging only individuals (rather than firms) was 39% in 2023, down from 50% in 2022.
- In 2023, the SEC recognized self-reporting, cooperation, or remedial efforts of 52% of the respondents charged in administrative proceedings, up from the 44% average in the 2013–2022 period. In two administrative proceedings, the remedial efforts and cooperation afforded by respondents to SEC staff resulted in no monetary penalties.
- From July 2013 through the end of December 2023, the SEC brought 108 cryptocurrency-related litigations and 65 administrative proceedings.
- Approximately 42% of the 108 actions litigated in U.S. courts occurred in New York. As of December 31, 2023, 57 of the 108 litigations had reached a resolution.
The views expressed herein are solely those of the authors and do not necessarily represent the views of Cornerstone Research.
