SEC's Crypto Crackdown: Charges Everywhere!
A Summary of the SEC's Recent Charges on Cryptocurrency Violations
Russian DeFi
April 06, 2023
The world of cryptocurrency has been gaining more attention from regulatory bodies. The US Securities and Exchange Commission (SEC) has been bringing charges against crypto projects and founders who violate securities laws. In this article, we will provide a summary of recent charges brought by the SEC against various crypto-related companies and individuals.
TL; DR ⤵️
The SEC has charged several crypto projects and founders for violating securities laws. The recent charges include:
Beaxy, a crypto exchange, charged for operating as an unregistered crypto exchange.
Coinbase received a notice from the SEC over its crypto offerings.
The SEC sued Tron founder Justin Sun over market manipulation charges.
Nothing is New Under the Sun 🌞
The SEC alleges that Justin Sun, the founder of Tron, sold TRX and BTT as investments through unregistered bounty programs and airdrops, violating Section 5 of the Securities Act. This charge is not new as Sun has been under investigation for quite some time.
The Celebrities Are Not Left Out 🌟
Kim Kardashian was charged by the SEC for failing to disclose the cash she received for promoting crypto assets on social media. She agreed to pay $1.26 million in penalties and cooperate with the Commission's investigation.
Beaxy is Forced to Shut Down 💼
Beaxy, a crypto exchange, was charged with operating as an unregistered crypto exchange. The founder was also sued for raising $8M via the unregistered BXY token. The platform has been forced to shut down.
Who's Been Charged? 💰
It has been alleged that Terraform Labs PTE Ltd and Do Hyeong Kwon conspired to raise billions of dollars from investors by offering and selling an integrated suite of crypto assets.
SEC Got Nothing on Kraken 🤑
Kraken has ceased offering/selling securities through crypto asset staking services and paid $30 million for failing to register the offer and sale of their crypto-asset staking-as-a-service program.
Coinbase Receives a "Wells Notice" 💸
Coinbase received a "Wells notice" from the SEC regarding an undefined portion of listed digital assets, Coinbase Earn, Coinbase Prime, and Coinbase Wallet. Coinbase is confident in the legality of its digital assets and is ready to challenge the SEC.
Celebs Settle Charges for Crypto Violations 🤝
Celebrities settle charges for crypto violations without admitting or denying their guilt, according to the SEC, except for Soulja Boy and Mahone. More info on this from Semafor here.
Charges Against Former NBA Player Paul Pierce 🏀
Former NBA player Paul Pierce was charged for unlawful touting and making misleading statements about crypto security. The penalty was $1,115,000 plus approximately $240,000 for disgorgement and prejudgment interest.
Nexo Agrees to Pay $22.5 Million 💳
For failing to register the offer and sale of its retail crypto asset lending product, the Earn Interest Product, Nexo agreed to pay a $22.5 million penalty. It means stopping the offer and sale of the EIP to US investors.
Conclusion 👇️
The SEC is increasing its efforts to regulate the crypto market. Crypto projects and founders must be careful to comply with securities laws to avoid charges and penalties. It is important to stay informed of the regulatory landscape to avoid potential violations.