Federal and state regulators have made clear that a new wave of
enforcement is coming to the crypto industry. Night gathers, and
now our watch begins.
The Securities and Exchange Commission (“SEC”)
recently added an additional 20 positions in its Crypto Assets
and Cyber Unit, nearly doubling the unit's size, and recent
actions, including a first-of-itskind insider trading case against
a former employee at a crypto exchange, foreshadow more aggressive
enforcement to follow. The Commodity Futures Trading Commission
(“CFTC”), too, is focusing on increased enforcement.
Crypto companies and their founders are right to be concerned
about an SEC or other regulatory investigation. Investigations are
stressful, time-consuming, and expensive to defend in the best of
circumstances, and they carry risk of severe penalties or even
referral to criminal prosecution in the worst of circumstances.
