Surge in SEC's Crypto Actions: 183% Increase Following FTX Collapse

Following the bankruptcy of cryptocurrency exchange FTX, the United States securities regulator experienced a substantial surge in enforcement actions related to cryptocurrencies. A thorough examination of press releases from the U.S. Securities and Exchange Commission (SEC) and news reports revealed that, in the six months leading up to FTX's collapse, the SEC initiated approximately six enforcement actions.

However, within the six months subsequent to FTX's bankruptcy on November 11, 2022, the number of SEC enforcement actions pertaining to cryptocurrencies skyrocketed to at least 17. This increase represents a remarkable surge of approximately 183% compared to the preceding period.

The analysis fails to consider the impact of recent lawsuits filed by the SEC against Binance on June 5 and Coinbase on the following day.

These increased regulatory actions, including the recent lawsuits against both exchanges, have led some observers to suggest that the SEC is making an effort to compensate for its failure to regulate FTX adequately.

According to a report by MarketWatch, U.S. Representative French Hill characterized the recent crackdown as a defensive move by SEC Chair Gary Gensler and the regulator, stating this during an event in Washington, D.C. on June 7. Hill claimed that instead of overseeing FTX, Gensler was focused on criticizing Kim Kardashian for her promotion of cryptocurrency in a Super Bowl ad. Hill added that the enforcement actions taken by the SEC in 2023 seemed like a "cover your ass" strategy.

Markus Thielen, the head of research and strategy at Matrixport and author of the book Crypto Titans: How trillions were made and billions lost in the cryptocurrency markets, previously expressed his belief to Cointelegraph that there is an element of "embarrassment" for those who failed to identify the issues at FTX.

Brad Garlinghouse, the CEO of Ripple, echoed this sentiment in a tweet on June 6, claiming that the SEC is throwing lawsuits around in an attempt to divert attention from its mishandling of the FTX situation.