After a sluggish start to 2024, the Securities and Exchange Commission significantly ramped up its cryptocurrency-related complaints in the third quarter (Q3). According to Finbold Research, the number of crypto litigations filed by the SEC surged from 3 in Q2 to 12 in Q3, marking a fourfold increase.
Furthermore, September saw a particular uptick in activity as the month witnessed more cases than the entirety of Q1.
Since January, the Commission also announced the conclusion of several high-profile cases. In March, it revealed it had obtained default judgment against Sameer Ramani – an insider-trading accomplice of Coinbase’s (COIN) former product manager.
In mid-September, the SEC also revealed it had settled with FTX auditor Prager Metis, accused of severe negligence between February 2021 and April 2022.
The regulator singled out the failure to detect the risks emerging from the links between the exchange and Alameda Research as particularly damning.
Cryptocurrency-related cases involve a wide variety of crimes
The cryptocurrency-related cases of 2024 feature a wide variety of alleged crimes, with unregistered securities offerings and sales remaining particularly common.
Additionally, scammers have continued leveraging digital assets’ popularity to solicit investments, frequently misrepresenting their business and, sometimes, even taking money for completely fictitious investments.
Still, as Andreja Stojanovic, a co-author of the research, pointed out:
“Many of them are not truly lawsuits targeting the industry, as many involved other types of fraud that simply utilized cryptocurrencies’ popularity and reputation as lucrative – if risky – investment vehicles.”
Indeed, despite the non-trivial number of digital asset cases announced by the SEC, they constitute only 9.21% of the 228 complaints reported by the Commission.
