This summer was a busy one for cryptocurrency regulators, with aggressive actions potentially signaling an increase in consumer protection compliance activity.
In August alone, the New York Department of Financial Services (“DFS”) brought its first enforcement action against a DFS-licensed “virtual currency business” – resulting in a $30 million settlement with cryptocurrency investing platform Robinhood Crypto, LLC – and the U.S. Securities and Exchange Commission charged 11 people in an alleged crypto pyramid and Ponzi scheme called Forsage. The U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned and banned currency mixer Tornado Cash, alleging that the platform laundered more than $7 billion in virtual currency since launching in 2019.
Cryptocurrency enforcement actions
These recent moves follow others that also signal regulators and justice officials are being more aggressive with crypto companies:
- In July, the Department of Justice charged a former Coinbase employee with insider trading, alleging he shared insider information that benefitted his brother and a friend. In that case, the SEC made the near-unprecedented move of labeling nine different crypto tokens as securities, a move signaling significant change to how crypto businesses will be treated going forward.
- Just weeks earlier, the DOJ criminally charged six people in four separate cases of alleged cryptocurrency fraud, including the largest known…
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