Crypto lawsuits seem to be increasing in America.
The crypto space is still in its infancy when compared to other financial industries, with growing interest in crypto coins and crypto exchanges just peaking in the past several years. In that context, legal control and regulation of crypto are still discussed, and there is a public perception that most of the crypto-related crimes go undetected and even unpunished.
Taking a deep look into the crypto lawsuits filed by the SEC and other class action suits, reporters have managed to shine a light on crypto lawsuits in the US over the last 5 years. There are different kinds of crypto lawsuits, the firms, and people involved in lawsuits, and which years have seen most of these crypto lawsuits filed.
The Crypto Lawsuits
Up to 105 crypto lawsuits have been filed with the SEC since 2018. Notably, the regulators have been active since the number of lawsuits has been increasing steadily with a staggering 41 lawsuits filed in 2022. Here is a look at the years with the most number of crypto lawsuits since 2018.
41 Crypto-Related Lawsuits In 2022
Last year had the most crypto-related lawsuits, with up to 41 in America alone. 19 of these were filed by the Securities and Exchange Commission (SEC) and 22 came as class action securities lawsuits. In October, a prominent case saw the SEC charge Kim Kardashian with promoting EthereumMax, there are more than 50,000 news articles about that case as published by Google News.
Another huge scandal happened in December after the collapse of the FTX trading platform. The former CEO Sam Bankman-Fried is now on $250 million bail while he faces different charges that might result in a maximum sentence of 115 years in prison. Bankman-Fried has already pled not quickly to all the charges.
This developing story might become the largest case in the history of crypto law and has already attracted lots of interest online with different commentators voicing different opinions and conspiracy theories surrounding this case.
24 Crypto-Related Lawsuits In 2020
As opposed to 2022, crypto was booming in 2020. Bitcoin exploded from $7,175 on January 1st to $28,985 on New Year’s Eve, a 300% growth. The increased interest in crypto because of the boom also saw a growth in the number of crypto lawsuits in the United States. There were 34 cumulatively, 13 more than the year before, which is a 61.9% increase.
The SEC introduced several high-profile suits, one of which was against John McAfee, the late businessman who faced charges of non-disclosure of payments when promoting a crypto product. Another notable lawsuit was pushed against Binance, a renowned crypto trading exchange that was already the largest in the world in 2020. That case was eventually dismissed in 2022.
Buy Bitcoin Now30 Crypto-Related Lawsuits In 2018
2018 was the first year reviewed in the five-year study of crypto-related legal actions. Despite crypto usage being less widespread than in 2021, there were two more lawsuits filed than three years earlier. Up to 30 SEC and class action lawsuits happened in the US, with 16 of those being filed by the SEC.
A notable case published by the SEC in 2018 was against Paragon Coin Inc, a crypto that declared bankruptcy in 2020. An official statement by the Paragon team in 2020 said:
“Our goal was to build a much-needed decentralized solution for the cannabis industry, however, our plans were impossible to achieve due to several legal mistakes.”
The legal mistake in question was an unregistered initial coin offering (ICO) of its digital tokens that raised over $12 million from investors.
2023 has also started on a high note in terms of crypto lawsuits. Many in the space wonder: is it a strategy by the US government to make crypto a safe investment or ban the nascent industry eventually?
