In January of 2023, the DOJ secured its first victory when it indicted two individuals for operating an unlicensed bitcoin exchange. This was followed in March by the conviction of a man who had defrauded investors in a cryptocurrency Ponzi scheme.
In April, the DOJ secured the conviction of the creator of the darknet marketplace Silk Road. This was followed in May by the conviction of the creator of the first Bitcoin exchange.
In June, the DOJ announced the indictment of the operators of a large-scale cryptocurrency mining operation. This was followed in July by the indictment of the operators of a bitcoin exchange that had been hacked.
In August, the DOJ announced the indictment of the operators of a ransomware scheme. This was followed in September by the indictment of the operators of a cryptocurrency pyramid scheme.
In a year, the DOJ successfully prosecuted Sam Bankman-Fried of FTX and dethroned Changpeng Zhao, the former head of Binance.
These prosecutions brought a sense of reality to the industry and highlighted the DOJ’s role in shaping its future.
The DOJ has been very proactive in defining the crypto industry, with former federal prosecutor Widge Devaney stating that it is a lot more real than whether something is a security or not.
This is in contrast to the ongoing battles of the SEC in court.
The SEC has also taken action against a number of fraudulent Initial Coin Offerings (ICOs).
However, some have seen this as a missed opportunity for the SEC to assert its authority.
The SEC has been fairly quiet when it comes to crypto, only bringing a few cases against fraudulent ICOs.
Some see this as a missed opportunity for the SEC to assert its authority and show that it is serious about regulating the crypto world.
Coinbase and Binance have both filed motions to dismiss the SEC’s charges, with Coinbase arguing that the SEC has no jurisdiction over the case.
While the SEC’s cases against Binance and Coinbase have faced opposition from the defendants, the DOJ’s criminal prosecutions have seen notable success.
Coinbase and Binance, two of the world’s largest cryptocurrency exchanges, are currently facing charges from the SEC.
However, both exchanges have filed motions to dismiss the charges, with Coinbase arguing that the SEC has no jurisdiction over the case.
Despite the challenges posed by the SEC, the DOJ has seen success in its criminal prosecutions of cryptocurrency exchanges.
The SEC’s decision not to join the settlement between the DOJ and Binance signals that the agency is intent on continuing to fight for the classification of tokens traded on the exchange as securities.
This is a critical issue that is likely to be appealed to higher courts.
SEC’s Main Enforcement Actions Remain Unsolved
The SEC has had mixed success in its enforcement actions against cryptocurrency exchanges and other entities involved in the digital asset space.
While several defendants have reached settlements, including Kraken and Bittrex, as well as celebrities like Floyd Mayweather and DJ Khaled, some of the SEC’s most high-profile actions are still mired in legal complexities.
Cryptocurrencies are facing an uncertain future as competing rulings by judges in the same federal court create confusion over their classification.
SEC Chair Gary Gensler has taken a tough stance against the crypto sector, bringing a wide range of cases alleging fraud, failure to register as an exchange, and non-disclosure of payments received for promoting crypto.
This has created a difficult environment for cryptocurrencies to thrive in, and their future remains uncertain.