Surge in U.S. Crypto Enforcement Actions: A Record-Breaking Year for Regulators

The Year of Crypto Crackdowns

2022 saw an explosive increase in crypto-related enforcement actions across the U.S., as reported by blockchain risk firm Solidus Labs. Both federal and state regulators were busy breaking their own records, as if they were participating in some sort of competitive sport—but instead of medals, they sought sanctions.

Federal Agencies Join the Crypto Enforcement Party

Imagine a party where everyone is invited, but some guests are a little too excitable with their enforcement napkins. Last year, four federal agencies combined their efforts to issue a whopping 58 enforcement actions. That’s a significant jump from 38 in 2021 and a record-breaking leap from the previous high of 40 recorded in 2020. It’s clear that crypto regulators were not playing around!

Key Players in the Enforcement Game

The federal agencies included the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), and the Office of Foreign Assets Control (OFAC). While everyone broke their records, FinCEN didn’t get the memo about the fun—its actions fell short, with only one enforcement compared to its usual four. Talk about hitting the snooze button!

Who Took Home the Most Dice?

The SEC topped the leaderboard, launching 30 individual actions, with civil suits following arrests becoming a notable trend. The agency even pocketed $242 million in penalties—someone’s getting a raise! Meanwhile, the CFTC sped forward with 19 actions in 2022, marking a 73% increase from 2021.

OFAC’s Major Move

OFAC elbowed its way into the spotlight with eight actions, including a memorable crackdown on Tornado Cash, which resulted in a sharp decline in activities surrounding it. Clearly, this was a wake-up call for everyone messing around in the crypto space.

States Enter the Enforcement Arena

On the state level, things got even more frenetic. There were a staggering 112 enforcement actions across 16 states, with newcomers getting a taste of the enforcement pie. Texas and Alabama regulators were not shy about making their presence known, each having six cases, while Texas has maintained dominance with a staggering 59 actions over the years.

Patchwork of State Regulations

The lack of federal action appears to have prompted a surge of activity from various states, resulting in a fascinating patchwork of licensing regimes. We’re seeing states like New York and California fans recreate the Wild West of crypto law! What does this mean for the future? Well, let’s just say it’s time to strap in.

Looking Ahead: What’s Next for Crypto Regulation?

The future looks like it could be just as eventful, with FinCEN ramping up efforts and tightening sanctions likely in the pipeline. So, whether you’re a crypto enthusiast or just trying to keep up with where your investment is going, buckle up; the authorities are taking this “digital gold” business seriously.