The U.S. Securities and Exchange Commission (SEC) has marked another year of rigorous enforcement in the realm of crypto-related misconduct. In its fiscal year report released on Tuesday, the SEC highlighted its achievements in notable cases, including Terraform Labs, Richard Heart, and Sam Bankman-Fried, showcasing a commitment to regulating the rapidly evolving cryptocurrency landscape.
The report revealed a substantial increase in the number of enforcement actions filed by the SEC this year compared to 2022, totaling 784, reflecting a 3% uptick. Among these actions, 501 were standalone, representing an 8% increase year-on-year. The commission emphasized that this year’s enforcement efforts resulted in nearly $5 billion in financial remedies and the distribution of almost $1 billion to investors harmed by crypto-related misconduct.
Notably, the $5 billion in remedies secured this year stands as the second-most lucrative in SEC history, following the record-breaking figures of 2022. The report underscored the SEC’s commitment to upholding investor protection through its enforcement actions.
One remarkable achievement of the SEC’s Whistleblower Program in 2023 was the record-breaking award of $279 million to an individual who provided a valuable tip. This underscores the effectiveness of the program in encouraging individuals to come forward with information related to securities violations.
However, the report omitted a critical record set by SEC Chair Gary Gensler, who has filed the highest number of rules and regulatory proposals by a single chairperson since the aftermath of the 2008 financial crisis. Gensler has presented 47 proposals during his tenure, with 22 of them already adopted. This surpasses the regulatory output of his predecessors, signaling an assertive approach to overseeing the financial markets.
Critics, however, argue that the sheer volume of regulatory proposals does not necessarily equate to quality regulation. Some stakeholders, both within and outside the crypto industry, express concerns about the SEC’s swift regulatory actions without clear guidelines for the crypto space. Executives contend that the lack of transparent rules leaves market participants unsure about compliance expectations.
Despite criticism, the SEC maintains its stance that increased regulation is necessary to protect investors amid rapid technological advancements. The commission asserts that its regulatory efforts are in response to the evolving landscape of the crypto industry. Notably, the SEC holds the position that every Initial Coin Offering (ICO) is inherently unlawful, contributing to its overarching goal of safeguarding investor interests in the cryptocurrency market.