The number of cryptocurrency-related enforcement actions in the United States grew markedly in 2022, according to a survey published by blockchain risk monitoring firm Solidus Labs. Both federal and state regulators have broken records on this front.
In 2022, the four main US federal agencies dedicated to cryptomining carried out 58 measures. This number surpassed the previous high of 40 recorded in 2020 and increased 65% from 38 shares in 2021.
The agencies – the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) – batted their previous records, except for FinCEN, which had one action in 2022 compared to four in other years since 2013.
The SEC topped the list of regulators in 2022, with 30 actions, nine of which were civil lawsuits filed after the arrests, and some of which are ongoing. The sanctions amounted to 242 million dollars. The report stated:
“The SEC announced 30 cryptocurrency-related measures in 2022, more than any other regulator we identified worldwide.”
The CFTC carried out 19 actions, up 73% from the 11 in 2021. Those cases accounted for 21.95% of the agency’s activity, which was also a record and compares to the 4.76% share of cryptocurrencies in the SEC cases.
OFAC’s eight cases surpass its previous record of five, with the Tornado Cash sanction being the most significant case. The report notes that Tornado Cash activity has dropped dramatically since OFAC’s action, despite industry protests.
The report also notes that FinCEN activity is likely to increase this year following the tightening of sanctions on Russia and the strengthening of the Treasury Department’s whistleblower program. So far, all of FinCEN’s cryptocurrency-related actions have been for violations of the Bank Secrecy Act.
State’s are increasing their rule makings, enforcement actions, and overall activity as it relates to #crypto in the absence of federal action.
We are starting to see a patchwork of licensing regimes form (NY, LA) with other states not far behind (NJ, CA). What does this mean?
— Cody Carbone (@CodyCarboneDC) February 2, 2023
“States have jumped into the race,” the report says. States took a total of 112 actions in 2022, up from 89 in 2021 and 52 in 2020. Sixteen states took their first action and eight broke their records. Another 11 states tied their previous enforcement records, and in 15 states the record was “unbroken.” The report does not explicitly say whether all 50 states took action.
Regulators in Texas and Alabama were the most active, with six cases each. The Texas State Securities Board, which issued the first cryptocurrency-related state enforcement order in 2017, is the all-time state leader with 59 actions, “four times that of the next most active state regulators, the Colorado Division of Securities and Washington State Department of Financial Institutions”.
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