SEC crypto enforcement actions up 50% in 2022 – nearly half against ICOs

The U.S. Securities and Exchange Commission (SEC) brought 30 enforcement actions against crypto market participants last year — the highest since 2013, according to a Cornerstone Research report.

The number of SEC enforcement actions in 2022 was up 50% from the 20 actions launched in 2021, the report stated.

Out of the 30 enforcement actions, 14 focused on Initial Coin Offerings (ICOs) for alleged unregistered securities offerings, the report found. Around 57% of these ICO related actions also included allegations of fraud, as per the report. The SEC has launched 127 enforcement actions between 2013 and 2022, and 55% of them focused on ICOs.

Fraud and unregistered securities offering have been the most common allegations in majority of the SEC enforcement actions. Of the 127 actions, 59% alleged fraud while 73% alleged unregistered securities offering and 44% alleged both.

The SEC charged a total of 79 defendants in 2022, out of which 79% were individual defendants while the remaining 21% were firms. The proportion of SEC enforcement actions charging only individuals grew under Gary Gensler’s leadership from around 20% between 2013 and 2020 to 35% in 2021 and 50% in 2022, the report found.

Since 2013, the SEC has imposed fines on crypto firms totaling $2.61 billion, of which, over 9% or $242 million was imposed last year alone.

New York has been home to 44% of the 82 litigations SEC launched against crypto-related firms and individuals since 2013, as per the report. However, over the recent years, SEC is increasingly litigating crypto respondents in other states, the report said.