Compliance » Crypto-Bankruptcies Have SEC and CFTC Casting Wider Net

Crypto-Bankruptcies Have SEC and CFTC Casting Wider Net

April 19, 2023

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The SEC and CFTC have widened the scope of their regulatory actions recently as crypto firm bankruptcies worsen liquidity concerns. Any participant in the cryptocurrency space is at risk, and managing that risk is critical. The DOJ will continue to focus on frauds, but more complicated money laundering prosecutions against actors that facilitate crypto transactions which conceal or promote illegal activity, either knowingly or with willful blindness, are in jeopardy as well. Regulators will use the same standards and methods they use in the securities/commodities space, i.e. anti-manipulation, anti-touting, insider trading, and statutory underwriting. When crypto enterprises fail, venture capital firms that backed them will also be targeted for class actions by plaintiffs’ firms looking for deep- pockets.

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