Dark Patterns Leading To The Dark Forest – The Next Frontier Of Crypto Enforcement?

Over the past several months, there has been a sea change in terms of the regulatory approach to blockchain and digital assets in the United States. The U.S. Securities and Exchange Commission (the "SEC") has done a veritable 180-degree turn and has gone from a "regulation by enforcement" posture, in which it viewed most digital assets as unregistered securities, to setting up a crypto task force to facilitate digital asset activities and set clear boundaries as to when the securities laws apply to those activities. This new approach to blockchain and digital assets has resulted in the SEC ending a number of high-profile active enforcement actions and closing many more enforcement investigations involving digital assets. There is a growing recognition that digital assets are not themselves securities and, unless sold in investment contract transactions, are not subject to U.S. securities laws.¹