The Aftermath of FTX: A Tidal Wave of SEC Activity

The cryptocurrency world shuddered when FTX, a leading exchange, collapsed on November 11, 2022. Following this monumental event, the U.S. Securities and Exchange Commission (SEC) kicked its enforcement actions into high gear. An analysis reveals that in the half-year following the fall of FTX, the SEC ramped up its enforcement from approximately six to at least 17 actions, marking a staggering 183% increase.

Counting the Actions: A Quantitative Dive

Let’s get nerdy for a moment. Prior to the FTX debacle, the SEC’s activity around cryptocurrency seemed leisurely at best. But post-FTX? It’s as if they hopped on a caffeine-fueled rollercoaster. In this new six-month period, the SEC was not just busy; they were throwing down the gauntlet. Notably, this analysis omits two major recent lawsuits against Binance and Coinbase, which might just push those numbers even higher.

Covering Their Backside: Regulatory Panic?

U.S. Representative French Hill didn’t mince words when weighing in on this new wave of enforcement. He suggested that the SEC’s actions were more about “cover your ass” maneuvers rather than proactive governance. It’s like a student who procrastinates all semester, only to scramble for a satisfactory project the night before. Hill pointed out that while the SEC chair, Gary Gensler, was busy taking potshots at celebrities promoting crypto, the real issues, like FTX, were left unchecked.

Expert Opinions: Embarrassment in the Air

Industry insiders are picking up on this theme of embarrassment. Markus Thielen, head of research at Matrixport, aired his views on social media, implying there’s a lingering humiliation for regulatory bodies that failed to notice looming issues at FTX until it was too late. The sentiment resonated deeply within the community, showcasing that even seasoned veterans aren’t immune to the waves of shame following such colossal market failures.

Throwing Lawsuits: A Distracting Tactic?

In a tweet that could only be described as a mic drop, Ripple CEO Brad Garlinghouse suggested that the SEC was merely ‘throwing lawsuits at the wall and hoping for a distraction’ away from their FTX mismanagement. This line of thought highlights a pervasive concern: are these legal actions genuine moves toward better regulation or just a frantic attempt to save face?