Cryptocurrency-related enforcement actions undertaken by the United States securities regulator significantly increased in the six months following the bankruptcy of cryptocurrency exchange FTX.
An analysis of press releases from the U.S. Securities and Exchange Commission (SEC), and news reports on its actions, found that in the six months preceding FTX’s collapse, the SEC undertook approximately six enforcement actions.
In the six months after FTX’s bankruptcy on Nov. 11, 2022, SEC crypto-related enforcement actions jumped to at least 17, an estimated increase of 183% from the preceding period.
Graph showing the number of SEC enforcement actions in each six-month period relating to crypto.
The analysis doesn’t account for the two recent lawsuits the SEC brought against Binance on June 5 and Coinbase a day later.
The increased actions, including the recent ones taken against the two exchanges, led to some observers suggesting the SEC is attempting to redeem itself for failing to police FTX.
MarketWatch reported that U.S. Representative French Hill said the recent crackdown was a “cover your ass” move from the regulator and SEC chair Gary Gensler, while speaking at an event in Washington, D.C. on June 7.
Let’s talk crypto. @RepFrenchHill says to Peter Roskam and Heath Shuler that bipartisanship played a huge role in drafting stablecoin legislation. #BHLegSem23 #BHEvents #Congress pic.twitter.com/D3B60qNgpS— BakerHostetler (@BakerHostetler) June 7, 2023
Hill claimed that instead of Gensler “overseeing FTX,” the SEC head was instead “out bashing Kim Kardashian because she’s promoted crypto on some Super Bowl ad,” adding:
[Gensler] opened up this year, in 2023, with all these enforcement actions; I think it looks like [cover your ass] to me.
Markus Thielen, the head of research and strategy at Matrixport, and author of the book Crypto Titans: How trillions were made and billions lost in the cryptocurrency markets, previously told Cointelegraph he believes there’s an air of “embarrassment” for those who didn’t catch the issues at FTX.
Ripple CEO Brad Garlinghouse echoed the sentiment, claiming in a June 6 tweet that the SEC is “throwing lawsuits at the wall and hoping they distract from the agency’s FTX debacle.”
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