The Securities and Exchange Commission (SEC) has proudly announced that it has had another “highly productive and impactful” year enforcing crypto-related misconduct, highlighting cases like Terraform Labs, Richard Heart, and Sam Bankman-Fried.
According to its fiscal year report published on Tuesday, the SEC filed more enforcement actions this year than in 2022, with 784 in total — up 3% from last year. Of these, 501 are stand-alone enforcement actions, marking an 8% increase year-on-year.
The commission ordered almost $5 billion in financial remedies in 2023 and distributed nearly $1 billion to harmed investors, the report added.
- The $5B in remedies obtained this year makes it the second-most lucrative year for the SEC, after the record-breaking numbers of 2022.
- In 2022, the SEC also distributed over $900 million to harmed investors.
- This year’s SEC Whistleblower Program awarded a record-breaking $279 million to one person who submitted a useful tip.
The SEC’s report doesn’t mention the most important record it broke this year: the amount of rules and regulatory proposals filed by a single chairperson since the aftermath of the 2008 financial crisis. In the first 850 days of his leadership, SEC chair Gary Gensler has put forward 47 proposals; 22 of which have been adopted. These figures have only grown larger since they were tallied at the end of August 2023 by the Financial Times.
However, Gensler’s firm hand has been criticized on both sides of the aisle, who feel that when it comes to regulation, quantity can never match quality. The 2010 Dodd-Frank financial reform act and other laws mandated 59% of former chair Mary Jo White’s proposals from 2013 to 2015. Meanwhile, just 17% of Gensler’s proposals were mandated by congressional legislation, the FT reported less than three months ago.
The crypto industry has reacted particularly negative towards the SEC’s regulatory crackdown. Executives have expressed concern over the rapid rise in enforcement action when clear crypto guidelines are lacking — leaving guilty parties ‘unaware’ of how to adhere to non-existent guidelines, they claim.
The SEC, however, maintains that investor protection is at the heart of its work. A rise in regulation is in response to swift technological advancements, the commission argues. And when it comes to crypto, the SEC believes that every ICO is unlawful.