SEC

SEC Imposes $5 Billion in Penalties, Sending a Strong Warning to the Crypto Industry

The US Securities and Exchange Commission (SEC) announced that it had sued Wall Street brokerages and numerous major players in the cryptocurrency business during the fiscal year 2023, resulting in about US$5 billion in fines and money that had to be repaid to investors.

On Tuesday, Nov. 14, the SEC announced that the total amount of fines it had won between October 2022 and September 30 was the second-highest amount ever. The regulator outlined its actions on cybersecurity, digital assets, and Wall Street brokerage staff utilizing prohibited communication channels for commercial purposes in a statement.

The work of the division of enforcement as a beat cop benefits the investing public, according to SEC chair Gary Gensler. In comparison to 2022, the agency said that it had filed 784 enforcement actions, a 3% rise.

Some in the sector view Gensler as the agency's greatest adversary in Washington due to its emphasis on cryptocurrency. In fiscal year 2023, Sam Bankman-Fried, a co-founder of FTX, was the target of a civil lawsuit filed by the SEC. The Department of Justice's criminal accusations against the former frontman of FTX have taken precedence over the regulator's action.

The SEC also brought legal action in fiscal 2023 against a number of other significant cryptocurrency companies, such as Coinbase Global and Binance Holdings, which is helmed by Changpeng Zhao. Coinbase, Zhao, and Binance have all requested that the regulator's charges be dropped and denied any misconduct.

The regulator's enforcement branch only handles a small portion of the high-profile crypto activities. The government also disclosed 2023 agreements against auditors for alleged standards violations and with leading Wall Street brokerages for their use of unmonitored communications.