The US Security and Exchange Commission has continued the fight against fraudulent crypto activities to protect investors in the crypto market. Industry executives and attorneys expect regulation by enforcement to continue in the absence of concrete crypto legal frameworks.
Recently, there has been a surge in crypto-related lawsuits and enforcement actions. The SEC most recently charged 11 people for allegedly founding and promoting a fraudulent crypto pyramid and Ponzi scheme called Forsage, which they used to defraud more than $300 million from individual investors.
Just last month, three persons, a former Coinbase employee, his brother, and a friend, were prosecuted for insider trading. The SEC claims in its complaint that nine different crypto tokens constitute securities.
Further back on June 30, the Department of Justice accused six people of crypto fraud in incidents involving more than $100 million in losses. The greatest known NFT scheme charged to date was an alleged "rug pull" scheme involving the Baller Ape Club NFTs.
According to Ari Redbord, head of government affairs at TRM Labs, most of the recent enforcement activity has been in the works for some time.
He stated that fraudsters now seek ways to circumvent law enforcement or criminal justice systems.
“It feels very much like a lot is going on right now, but some of it is the culmination of what started six months or a year ago.”
In May, the SEC constituted a cyber team in the agency’s Division of Enforcement to the Crypto Assets and Cyber Unit. The team is responsible for protecting investors in crypto markets and cyber-related threats.
The regulator revealed at the time that it would add 20 people to the team bringing its headcount to 50.
Likewise, in February, the Department of Justice appointed a director for its National Cryptocurrency Enforcement Team — a new unit focused on digital asset seizure and blockchain-based lawbreaking.
