- The SEC has touted its productive year combating crypto activities, boasting actions against notable figures like Kim Kardashian and entities like FTX
- The authority’s enforcement resulted in $5 billion in financial remedies
- Notably absent from its report are mentions of setbacks in legal battles with Ripple and Grayscale
The Securities and Exchange Commission (SEC) has publicly celebrated “another highly productive and impactful year” cracking down on the crypto sector. In its 2022/23 fiscal year report, the SEC lauded its work on tackling various individuals and crypto projects, from Kim Kardashian to FTX, all of which contributed to almost $5 billion worth of enforcement. Strangely, the agency didn’t mention its defeats to Ripple and Grayscale, or the fact that it is being practically forced to launch a Bitcoin ETF by the courts, but these were almost certainly oversights…right?
From Crypto Exchanges to NFTs
In its report, the SEC highlighted how its enforcement division has clamped down on various facets of the crypto asset securities domain, encompassing billion-dollar frauds, unregistered offerings, and illicit celebrity endorsements. Notable investigations resulted in litigated charges against prominent figures such as Terraform Labs, Richard Heart, and FTX CEO Samuel Bankman-Fried.
The scrutiny extended to non-compliance with registration provisions, leading to charges against firms like Genesis/Gemini, Celsius, Kraken, and Nexo. Settlements were reached, involving substantial penalties, with Kraken agreeing to pay $30 million and Nexo settling for a $22.5 million civil penalty.
The SEC also celebrated its clampdown on the NFT sector, filing actions against issuers such as Impact Theory and Stoner Cats 2 for conducting illegal unregistered offerings of crypto asset securities in NFT form.
SEC Forgets About Ripple and Grayscale
The enforcement focus also encompassed the crypto asset intermediary space, with actions taken against platforms like Beaxy, Bittrex, Binance, and Coinbase, addressing alleged rampant noncompliance. The SEC’s cases against the latter may come to trial next year, but 2025 is more likely.
The SEC famously intervened in cases involving influencers who illicitly endorsed crypto asset securities without disclosing compensation. Personalities like Paul Pierce and Kim Kardashian settled charges by agreeing to pay civil penalties, disgorgement, and prejudgment interest, with SEC Chair Gary Gensler famously racing to a TV studio to be interviewed over the Kim Kardashian affair moments after the news dropped.
Among the celebrations was no mention of the SEC’s defeat to Ripple over its classification of XRP as a security or the ruling of Judge Neomi Rao that the agency’s dismissal of Grayscale’s Bitcoin ETF application was “arbitrary and capricious”.
Odd that, must have missed the deadline.
