There Is An Epic Crackdown Coming To Crypto‍

In a new Businessweek article authored by Olga Kharif, a cryptographer, she writes, "The crypto industry is finally getting the long-awaited hug from US law enforcement, which has long been rumored to be on a collision course." It's almost like the setup of a rom-com: Two groups, long rumored to be on a collision course, finally meet.

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It was reported that the US Commodity Futures Trading Commission filed a lawsuit against Binance, one of the largest digital asset exchanges in the world, accusing it of allowing American customers to trade on its offshore platform after telling the commission this wouldn't happen. As Binance’s CEO Changpeng Zhao wrote in a blog post, he disputed the allegations based on incomplete facts in the complaint.) There is no doubt that these moves are coming at a time when the crypto-to-court pipeline is very active.

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In March, the SEC also sued crypto entrepreneur Justin Sun, accusing him of manipulating the market, and also accusing celebrities, including Lindsay Lohan and Jake Paul, of promoting Sun's tokens without disclosing that they were compensated for doing so. There is an implicit message from regulators that they are out to tame the crypto market in almost every way, no matter whether Americans trade on US or offshore exchanges, whether they use platforms run by traditional corporations or whether they use apps that seem to be run by codes.

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Founder and chief of the Office of Internet Enforcement of the SEC, John Reed Stark, a consultant, says there is an onslaught of regulatory activity and a crackdown of epic proportions. They are starting to focus more on the major players. This is a major change, and these companies are running out of runway. Initially, they didn't target the biggest players, but they rather concentrated on the low-hanging fruit. However, they are now focusing on the major players more.

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It is clear that these new regulations have been put in place for quite some time. Experts say that they’ve been long overdue for them to become public, and that’s because of the increased resources that are being dedicated to crypto regulation as a whole. It is the Securities and Exchange Commission and the Consumer Financial Task Force that enforce finance rules in this field; the SEC almost doubled the number of crypto and cyber teams in 2022 when it brought a total of 30 cryptocurrency-related actions, up 50% from 2021, according to Cornerstone Research.

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The SEC has alleged that six celebrities in the scandal are connected to Sun's companies, including Lohan and Paul, and have paid to settle the civil charges without admitting or denying that their involvement in the scheme was illegal. Sun tweeted that he believes his complaint has no merit.