SEC and CFTC to Regulate Crypto and Crypto-Related Activities

I. INTRODUCTION

The rise of cryptocurrencies and digital property¹ within the monetary markets, together with the funding administration trade, has given rise to an important query: which federal regulator – the Securities and Alternate Fee (SEC) or the Commodities and Futures Buying and selling Fee (CFTC) will probably be primarily accountable to control using crypto and crypto-related actions? SEC Chair Gary Gensler has said that “[crypto] merchandise are topic to the securities legal guidelines and should work inside our securities regime,”² whereas then CFTC Commissioner Quintenz expressed that “the SEC has no authority over pure commodities or their buying and selling venues, whether or not these commodities are wheat, gold, oil…or crypto property.”³ On this article, we offer a high-level overview of the SEC’s and CFTC’s present jurisdiction over and remedy of crypto, and focus on current enforcement actions involving crypto and the potential significance thereof to different market individuals.

1. SEC Jurisdiction

The SEC has the authority to manipulate “securities”⁴, which has been outlined to incorporate, amongst different issues “funding contracts.” Notably, “forex” just isn’t a safety. To the extent {that a} type of a digital asset is set to be a word, funding contract or different kind of safety, it might be topic to SEC oversight and relevant securities legal guidelines.

Whether or not a digital asset is taken into account an funding contract depends upon the take a look at outlined by the U.S. Supreme Courtroom in SEC v. W.J. Howey.⁵ On this case, the Supreme Courtroom discovered that an “funding contract” exists the place (i) there may be the funding of cash; (ii) in a typical enterprise; (iii) with an affordable expectation of income to be derived; (iv) from the efforts of others. The Courtroom emphasised that the willpower of whether or not an funding contract exists lies within the circumstances surrounding the contract and the way through which it’s supplied, offered, or resold.

The Howey take a look at was emphasised by then Chair Clayton in his February 2018 speech earlier than the Senate Banking Committee on digital property.⁶ Later that 12 months, then Director of the SEC’s Division of Company Finance William Hinman utilized the Howey⁷ take a look at to crypto. Just like the Courtroom, he emphasised that for digital property particularly, the SEC seems to be to the nature of the transaction reasonably than the merchandise being offered – and whether or not the Howey components are current – to find out whether or not there may be an funding contract. He famous that digital property which might be offered “as a part of an funding; to non-users; by promoters to develop the enterprise – will be, and, in that context, most frequently is, a safety – as a result of it evidences an funding contract.”⁸ He additional famous that networks on which a coin is sufficiently decentralized, that’s the place the purchasers not moderately anticipate an individual to hold out important managerial efforts, don’t characterize funding contracts.

It is very important word that the SEC’s views on its capability to control crypto haven’t modified lately. SEC Chair Gensler continues to induce legislators to grant the SEC extra scope to supervise crypto in an effort to reinforce investor safety. He has additionally said, ““It doesn’t matter whether or not it’s a inventory token, a steady worth token backed by securities, or every other digital product that gives artificial publicity to underlying securities. These merchandise are topic to the securities legal guidelines and should work inside our securities regime…”⁹

2. CFTC Jurisdiction

In distinction to the SEC, the CFTC has full regulatory authority over derivatives transactions (together with swaps, futures, and choices), and extra restricted authority to control fraud and manipulation in commodities markets. The CFTC made its first official assertion on its jurisdiction over digital property in 2015. Later, in 2016, the CFTC cemented its place in an enforcement motion stating that, “bitcoin and different digital currencies are encompassed within the definition [of commodity] and correctly outlined as commodities, and are topic as a commodity to the relevant provisions of the [Commodity Exchange] Act and [CFTC] Laws.¹⁰ Then Chair Heath Tarbert expanded upon this definition in October of 2019 stating that, “it’s my view as Chairman of the CFTC that Ether is a commodity.”¹¹ Moreover, in a current case within the Southern District of New York, the courtroom discovered that “Bitcoin, Ether, Litecoin, and Tether tokens, together with different digital property, are encompassed inside the broad definition of “commodity” below Part 1a(9) of the [Commodity Exchange] Act.”¹²

Consequently, it’s extensively accepted that established and broadly decentralized digital currencies, like Bitcoin and Ether, are “commodities” and never currencies. Efforts to categorize these cryptocurrencies or others as “currencies” usually won’t stand up to regulatory scrutiny as a result of they’re items exchanged in a marketplace for uniform high quality and worth and thus fall each inside the widespread definition of commodity and the Commodity Alternate Act’s (CEA) definition of commodity.¹³ It is very important word that the “jurisdictional authority of CFTC to control digital currencies as commodities doesn’t preclude different businesses from exercising their regulatory energy when digital currencies operate in another way than spinoff commodities.”¹⁴

Though the CFTC has decided that digital currencies are commodities, the CFTC’s jurisdiction over digital forex markets is proscribed to policing fraudulent and manipulative actions in interstate commerce. Past the sort of enforcement authority, the CFTC doesn’t usually oversee digital forex transactions or exchanges that don’t contain margin, leverage, or financing, and can’t, for instance, require a spot crypto alternate to register with the CFTC. Because of the above, the CFTC is alleged to have “enforcement jurisdiction” over cryptocurrency and digital property, however not “registration jurisdiction.” A spot cryptocurrency product is usually a product that ends in precise supply of the cryptocurrency inside a selected market’s spot supply interval. An instance of a U.S.-based spot market is Coinbase.

Regardless of the CFTC’s lack of registration jurisdiction over spot markets, to the extent {that a} cryptocurrency product in a spot market supplies for margin or leverage and is obtainable to retail prospects, the product would usually be thought of a futures contract topic to CFTC jurisdiction.¹⁵ Particularly, to the extent that spot buying and selling supplies for margin and is obtainable to retail U.S. individuals, it falls below the CFTC’s broader and extra onerous registration jurisdiction.¹⁶

Moreover, there may be additional heightened regulatory scrutiny with reference to margined or leveraged merchandise. Lately, CFTC performing Director of Enforcement Vincent McGonagle said, “Within the digital asset house, we’ve introduced a number of actions towards entities the place they’re providing digital property, Bitcoin or others on a margin or finance foundation…and people merchandise needs to be on an alternate.”¹⁷

CFTC Chair Rostin Behnam not too long ago said that, “I sit up for working with this [Senate Agriculture] Committee to reexamine – and, if applicable, develop – the CFTC’s authority to make sure each the advantages and promise of the rising digital asset market and the underlying know-how will be harnessed with out undue hurt to prospects and monetary market stability.”¹⁸ Chair Behnam additionally said through the affirmation listening to that the current enforcement actions had been the “tip of the iceberg.” This implies there are a number of different enforcement circumstances within the CFTC’s docket, which can turn out to be public upon the submitting of such enforcement circumstances.

II. SEC AND CFTC ENFORCEMENT ACTIONS

1. SEC

i. Ripple Labs, Inc.

In 2020, the SEC initiated an enforcement motion towards Ripple Labs Inc. (Ripple), alleging that the sale of Ripple’s digital token (XRP), price a notional quantity of roughly US$1.3 billion, was an unregistered securities providing.¹⁹ The SEC alleged that Ripple distributed billions of {dollars}’ price of XRP as worker compensation in lieu of money with a purpose to finance its enterprise. Ripple supplies block chain-based networks that facilitate low-cost funds between monetary establishments. XRP is a digital asset that’s used to characterize the switch of worth throughout networks.

Particularly, the SEC claims that XRP is a safety whose supply and sale will be made solely pursuant to a statutory prospectus and an efficient registration assertion, and that as a result of Ripple didn’t file a registration assertion its traders have a rescission proper. The SEC alleged that XRP met the Howey take a look at by claiming that “the principal cause for anybody to purchase XRP was to take a position on it as an funding,” that Ripple mirrored a typical enterprise, and that traders moderately anticipated to revenue from these efforts. It additionally claims that, as a result of Ripple didn’t present a registration assertion, it made materials misstatements and omissions of knowledge that’s required of securities issuers when soliciting public funding. Whereas the case remains to be ongoing, in January 2022, the choose presiding over the case did grant Ripple’s request for privileged SEC paperwork, which mirror the SEC’s willpower on its classification of XRP as a safety.

The ultimate end result of the Ripple case, whether or not it’ll lead to XRP’s classification as a safety or not, can have important implications for the SEC’s jurisdiction over digital property. Together with the BlockFi motion, under, the Ripple willpower (when remaining) is predicted to offer much-needed readability to crypto market individuals on when a digital asset could be thought of a “safety” and topic to rather more onerous regulation by the SEC. We word, nonetheless, that the Ripple case is presently on the trial courtroom stage, and any resolution by the courtroom might be appealed and overturned, so it could be a while earlier than we’ve got a conclusive willpower on XRP’s standing.

ii. BlockFi Lending LLC

In February 2022, the SEC charged BlockFi Lending LLC (BlockFi) for failing to register the gives and gross sales of BlockFi Curiosity Accounts (BIAs), below the Securities Act of 1933 (Securities Act).²⁰ As well as, the SEC said that BlockFi met the definition of “funding firm” set forth in Part 3(a)(1)(C) of the Funding Firm Act of 1940 (1940 Act), for at the least a time frame, however didn’t register with the SEC because it was required to do, as a result of it issued securities and bought securities. The failure of an funding firm to register with the SEC (absent an exemption or exclusion) has critical penalties, together with that each one of its contracts are unenforceable.

First, the SEC decided that BIAs had been offered as securities (decided in accordance with the Howey take a look at) as a result of (i) BlockFi promised BIA traders a variable rate of interest, which was decided by BlockFi on a periodic foundation, in alternate for crypto property loaned by the traders, who might demand that BlockFi return their loaned property at any time, (ii) traders within the BIAs had an affordable expectation of acquiring a future revenue from BlockFi’s efforts in managing the BIAs primarily based on BlockFi’s statements about how it might generate the yield to pay BIA traders curiosity, and (iii) traders additionally had an affordable expectation that BlockFi would use the invested crypto property in BlockFi’s lending and principal investing exercise, and that traders would share income within the type of curiosity funds ensuing from BlockFi’s efforts. Consequently, the SEC discovered BIAs to represent funding contracts below the Securities Act. By providing and promoting the BIAs to most people to acquire crypto property for the overall use of its enterprise and promote the BIAs as an funding, the SEC decided that BlockFi supplied and offered securities, thereby performing as an issuer, with out submitting a registration assertion or qualifying for an exemption from the registration necessities, in violation of the 1940 Act.

Moreover, the SEC discovered that, for a interval of just about two years, BlockFi’s actions and holdings deemed it to be an “funding firm” below Part 3(a)(1)(C) of the 1940 Act. This part usually defines an “funding firm” as being any issuer that’s engaged or proposes to interact within the enterprise of investing, reinvesting, proudly owning, holding, or buying and selling in securities, and owns or proposes to accumulate “funding securities” (as outlined in Part 3(a)(2) of the 1940 Act) having a price of over 40% of the worth of the issuer’s whole property on an unconsolidated foundation. Within the SEC’s view, the truth that BlockFi lent crypto property to institutional and company debtors, lent U.S. {dollars} to retail traders, and obtained worth by providing and promoting BIAs into equities and futures, along with its substantial holdings of funding securities (representing greater than 40% of the worth of BlockFi’s whole property on an unconsolidated foundation) induced BlockFi to be an unregistered funding firm. Consequently, the SEC alleged that BlockFi violated Part 7(a) of the 1940 Act by participating in interstate commerce whereas failing to register as an funding firm with the Fee.

BlockFi agreed to pay a US$50 million penalty to settle the SEC expenses and ceased its unregistered gives and gross sales of BIAs. BlockFi additional agreed to aim to convey its enterprise inside the provisions of the 1940 Act inside 60 days. BlockFi’s father or mother firm not too long ago introduced that it intends to register below the Securities Act of 1933 the supply and sale of a brand new lending product.²¹

Though Blockfi is the primary case of its form introduced by the SEC with respect to a crypto lending platform, it could be a harbinger of issues to come back, significantly because the SEC has expressed eagerness to control the crypto market and not too long ago nearly doubled the scale of the Division of Enforcement’s Crypto Property and Cyber Unit.

On 7 September 2021, Coinbase Chief Government Officer (CEO) Brian Armstrong introduced that the corporate is below investigation by the SEC as a consequence of its cryptocurrency lending follow. Mr. Armstrong famous, that, “They [SEC] refuse to inform us why they suppose it’s a safety, and as an alternative subpoena a bunch of data from us (we comply), demand testimony from our workers (we comply), after which inform us they are going to be suing us if we proceed to launch, with zero rationalization as to why.” This additional demonstrates the purpose that the cryptocurrency and digital asset markets are below intense scrutiny from regulators.²²

Additional, related investigations and enforcement actions are identified to be pending towards Celsius Community LLC, Gemini Belief, and Voyager Digital with respect to related curiosity bearing account choices.²³ Because the SEC continues to implement its jurisdiction over the digital asset market, we’ll proceed to maintain you apprised of noteworthy enforcement and regulatory actions.

2. CFTC

The CFTC has initiated plenty of enforcement actions associated to crypto and has significantly been targeted on exchanges that provide crypto derivatives to U.S. individuals and should not registered with the CFTC. For example, in October 2020, the CFTC charged HDR International Buying and selling Restricted, 100x Holding Restricted, ABS International Buying and selling Restricted, Shine Effort Inc. Restricted, and HDR International Companies (Bermuda) Restricted’s (BitMEX) homeowners with illegally working a cryptocurrency derivatives buying and selling platform and with anti-money laundering (AML) violations as a consequence of offering U.S. individuals with crypto derivatives. A number of homeowners of BitMEX additionally had been charged with associated legal offenses. BitMEX changed its management group after the fees had been introduced, and its new CEO has not too long ago said that BitMEX plans to offer spot buying and selling, brokerage, and custody providers. On 11 August 2021, the CFTC introduced a consent order within the BitMEX case. Below the consent order, BitMEX paid a US$100 million civil financial penalty (US$50 million to CFTC and US$50 million to the Monetary Crimes Enforcement Community) and agreed to cease providing futures or different associated crypto commodity contracts in america till it secures applicable licensure from the CFTC. BitMEX additionally agreed to determine ample “know your buyer” and AML procedures.²⁴

Equally, the CFTC had beforehand introduced motion towards Laino Group Restricted (PaxForex), a global firm registered in Saint Vincent and Grenadines, which operated PaxForex and alleged that its info know-how infrastructure had been deployed to knowledge facilities in New York and London.²⁵ In June 2021, the Southern District of Texas entered an order of ultimate judgment towards PaxForex for violating CEA provisions concerning retail traders and for providing unregistered leveraged transactions in cryptocurrencies.²⁶ Particularly, the order notes that the web site format solicited U.S. prospects by offering prospects with a drop down menu with an choice of choosing america because the buyer’s nation of residence.²⁷ The PaxForex web site now states that the knowledge on its web site just isn’t supposed to be addressed to U.S. residents.

Moreover, on 18 September 2021, the CFTC settled expenses towards Payward Ventures, Inc. d/b/a Kraken (Kraken) for illegally providing margined retail commodity transactions (that are presumptively handled as futures contracts except sure mitigating components exist) in digital property, together with Bitcoin, and for failing to register as a futures fee service provider (FCM). Particularly, the CFTC alleged that Kraken supplied margined digital property to U.S. prospects who weren’t eligible contract individuals, on an alternate that was not registered as a derivatives contract market with the CFTC. In this system, Kraken provided digital property to prospects once they bought the property utilizing margin. Kraken then required the purchasers to exit their positions and repay the property obtained to commerce on margin inside 28 days. Prospects couldn’t switch property away from Kraken till they glad their compensation obligation, and Kraken might drive liquidation if compensation was not made inside 28 days. Consequently, the CFTC ordered that Kraken pay a US$1.25 million civil financial penalty and stop and desist from additional CEA violations.²⁸

As well as, on 15 October 2021, the CFTC issued an order towards iFinex Inc., BFXNA Inc., and BFXWW Inc. (d/b/a Bitfinex) for violations of Sections 4(a) and 4(d) of the CEA. Particularly, the CFTC alleges that Bitfinex supplied spot and leveraged, margined, or financed buying and selling in Bitcoin, Ether, and Tether to U.S. prospects. The CFTC additional alleges that the respondents transacted in retail commodity transactions with out registering as an FCM. Maybe most importantly, the CFTC introduced that the Tether stablecoin is a “commodity,” reaffirming that it has enforcement jurisdiction over the sort of cryptocurrency. The CFTC ordered that Bitfinex pay a US$1.5 million civil financial penalty and required Bitfinex to implement additional methods to stop illegal retail commodity transactions.²⁹

The CFTC has additionally initiated enforcement actions associated to tokens. On 15 October 2021, the CFTC settled expenses towards Tether Restricted, Tether Operations Restricted, and Tether Worldwide Restricted (d/b/a Tether) for violating Part 6(c)(1) of the CEA by making misrepresentations to prospects concerning its U.S. dollar-denominated stablecoin Tether. Particularly, the CFTC alleged that Tether made misrepresentations to U.S. prospects that Tether maintained ample fiat reserves to again each considered one of its stablecoins in circulation “one-to-one” with the “equal quantity of corresponding fiat forex” held in reserves by Tether, and that Tether would bear routine, skilled audits to exhibit that it maintained “100% reserves always.” The CFTC alleges that in truth, Tether failed to take care of fiat forex reserves in accounts in Tether’s personal identify or in an account titled and held “in belief” for Tether to again each U.S. greenback tether token in circulation. The CFTC has ordered that Tether pay a US$41 million effective.³⁰

Lastly, in February 2021 Coinbase reported that it was below investigation by the CFTC for alleged reckless false, deceptive, or inaccurate reporting in addition to wash buying and selling by a former worker. On 19 March 2021, Coinbase agreed to a settlement order with the CFTC through which Coinbase didn’t admit or deny wrongdoing and agreed to pay US$6.5 million.

The chart under summarizes sure CFTC enforcement actions.

III. CONCLUSION

In contrast to the earliest days of Bitcoin buying and selling, cryptocurrencies and digital property have now caught the attention of federal regulators and are topic to a a lot higher stage of regulatory scrutiny. Each the CFTC and SEC are asserting their jurisdiction on this house, and in lots of circumstances, extra readability is required to grasp whether or not a digital asset needs to be thought of a commodity (topic to the CFTC’s enforcement authority), or a safety (topic to the SEC’s jurisdiction). As well as, even with this readability, a associated query persists on whether or not the SEC and CFTC collectively have ample regulatory authority with a purpose to correctly regulate crypto markets, or if congressional motion is required. As crypto regulation evolves, market individuals can have a lot higher certainty, and in all chance a brand new regulatory regime involving each the SEC and CFTC. Because the SEC and CFTC proceed to implement their jurisdiction over the digital asset market, we’ll proceed to maintain you apprised of all noteworthy enforcement actions and regulatory updates.

FOOTNOTES

¹ On this piece, we use the phrases cryptocurrencies, digital property, and crypto property interchangeably.

² U.S. Sec. & Exch. Comm’n Chair Gary Gensler, Remarks Earlier than the Aspen Safety Kind (Aug. 3, 2021), obtainable at https://www.sec.gov/news/public-statement/gensler-aspen-security-forum-2021-08-03.

³ @CFTCquintenz, Twitter (Aug. 4, 2021, 9:30 AM), https://twitter.com/cftcquintenz/status/1422912721637580803?lang=en.

⁴ The time period “safety” is outlined in Part 2(a)(1) of the Securities Act of 1933, Part 3(a)(10) of the Securities Alternate Act of 1934, Part 2(a)(36) of the Funding Firm Act of 1940, and Part 202(a)(18) of the Funding Advisers Act of 1940.

⁵ See SEC v. W.J. Howey Co., 328 U.S. 293 (1946).

⁶ See U.S. Sec. & Exch. Comm’n Chair Jay Clayton, Chairman’s Testimony on Digital Currencies: The Roles of the SEC and CFTC (Feb. 6, 2018), https://www.sec.gov/news/testimony/testimony-virtual-currencies-oversight-role-us-securities-and-exchange-commission.

⁷ SEC v. W.J. Howey Co., 328 U.S. 293 (1946). The Howey Check refers back to the U.S. Supreme Courtroom case for figuring out whether or not a transaction qualifies as an “funding contract,” and subsequently could be thought of a safety. An “funding contract” is a transaction with the next properties: (i) an funding of cash, (ii) with the expectation of income, (iii) in a so-called “widespread enterprise” (i.e., traders and the enterprise succeed or fail collectively), and (iv) the expectation of income relies upon the entrepreneurial or managerial efforts of others.

⁸ See U.S. Sec. & Exch. Comm’n, Director, Division of Company Finance William Hinman, Digital Asset Transactions: When Howey Met Gary (Plastic) (June 14, 2018), https://www.sec.gov/news/speech/speech-hinman-061418.

⁹ See U.S. Sec. & Exch. Comm’n, Chair Gary Gensler Letter to Sen. Warren (Aug. 5, 2021), https://www.warren.senate.gov/imo/media/doc/gensler_response_to_warren_-_cryptocurrency_exchanges.pdf.

¹⁰ In re BFXNA INC. d/b/a BITFINEX, CFTC Docket No. 16-19 (June 2, 2016).

¹¹ Daniel Roberts, CFTC says cryptocurrency ether is a commodity, and ether futures are subsequent, Yahoo!Finance (Oct. 10, 2019), https://finance.yahoo.com/news/cftc-says-cryptocurrency-ether-is-a-commodity-and-is-open-to-ether-derivatives-133455545.html.

¹² Order, In Re Ifinex Inc., CFTC Docket No. 22-05 (Oct. 15, 2021) at n.2, https://www.cftc.gov/media/6651/enfbfxnaincorder101521.

¹³ Id.

¹⁴ Id.

¹⁵ “The Fee has lengthy held that sure speculative commodity transactions involving leverage or margin are futures contracts topic to Fee oversight…”See Interpretive Steerage and Coverage Assertion Concerning Retail Commodity Transactions Involving Sure Digital Property, 85 Fed. Reg. 37,734 (June 24, 2020).

¹⁶ CEA part 2(c)(2)(D)(i) captures “any retail transaction entered into, or supplied on a leveraged or margined foundation, or financed by the offeror, the counterparty, or an individual performing in live performance with the offeror or counterparty on an identical foundation.” See Interpretive Steerage and Coverage Assertion Concerning Retail Commodity Transactions Involving Sure Digital Property, 85 Fed. Reg. 37,734 (June 24, 2020). To the extent there may be precise supply of the digital asset inside 28 days of the contract initiation, the product could possibly be supplied to retail prospects off-exchange. Nevertheless, the CFTC’s steerage is troublesome to navigate by design, that means, within the CFTC’s view retail digital asset transactions with leverage ought to happen on a CFTC-registered alternate. This precept is usually deployed by enforcement investigations and actions, as mentioned under.

¹⁷ See Stewart Bishop, High Enforcement Officers Eye Particular person Prosecutions, LAW360 (Oct. 27, 2021), https://www.law360.com/fintech/articles/1435304/top-enforcement-official….

¹⁸ See Assertion of Rostin Behnam, Affirmation Listening to, U.S. Senate Committee on Agriculture, Vitamin, and Forestry (Oct. 27, 2021) at 2, https://www.agriculture.senate.gov/imo/media/doc/RBehnam_SenateAg_Confirmation_OpeningStatement_10-27-21_Final3.pdf. 

¹⁹ Grievance, Sec. Exch. Comm’n v. Ripple Labs, Inc., No. 20 Civ. 10832 (S.D.N.Y. filed Dec. 22, 2020), https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf.

²⁰ Order Instituting Stop-and-Desist Proceedings, In Re BlockFi Lending LLC, Securities Act Launch No. 11029 (Feb. 14, 2022), https://www.sec.gov/litigation/admin/2022/33-11029.pdf.

²¹ In parallel actions, BlockFi agreed to pay a further US$50 million in fines to 32 states to settle related expenses. See Order Instituting Stop-and-Desist Proceedings, In Re BlockFi Lending LLC, Securities Act Launch No. 11029 (Feb. 14, 2022), https://www.sec.gov/litigation/admin/2022/33-11029.pdf.

²² See Dave Michaels and Paul Vigna, Coinbase Says SEC Is Investigating Its Crypto Lending Program, WALL STREET JOURNAL (Sept. 8, 2021, 3:25 PM), https://www.wsj.com/articles/coinbase-says-sec-plans-enforcement-action-over-crypto-lending-program-11631110478?mod=hp_lead_pos2.

²³ See Order Instituting Stop-and-Desist Proceedings, In re Celsius, (Sept. 17, 2021), https://www.njoag.gov/new-jersey-bureau-of-securities-orders-cryptocurrency-firm-celsius-to-halt-the-offer-and-sale-of-unregistered-interest-bearing-investments/; Joe Mild, Matt Robinson, and Zeke Fake, Crypto Lending Corporations Face SEC Scrutiny, BLOOMBERG (January 26, 2022), https://www.bloomberg.com/news/articles/2022-01-26/crypto-lending-firms-celsius-network-gemini-face-sec-scrutiny; See Order Instituting Stop-and-Desist Proceedings, In re Voyager, (March 30, 2022), https://www.nj.gov/oag/newsreleases22/Voyager Summary Order.pdf.

²⁴ See Federal Courtroom Orders BitMEX to Pay $100 Million for Illegally Working a Cryptocurrency Buying and selling Platform and Anti-Cash Laundering Violations, CFTC Launch No. 8412-21, https://www.cftc.gov/PressRoom/PressReleases/8412-21.

²⁵ CFTC v. Laino Group Restricted d/b/a Paxforex, 20-cv-03317 (S.D. Tex.).

²⁶ See Order of Remaining Judgment by Default, Everlasting Injunction, and Civil Financial Penalty, CFTC v. Laino Group Restricted d/b/a Paxforex, 20-cv-03317 (S.D. Tex. June 7, 2021).

²⁷ Id. at 4-5.

²⁸ See Order, In re Payward Ventures, Inc. d/b/a Kraken, CFTC Docket No. 21-20 (Sept. 28, 2021).

²⁹ Id.

³⁰ See CFTC Orders Tether and Bitfinex to Pay Fines Totaling $42.5 Million, CFTC Launch No. 8450-21 (Oct. 15, 2021), https://www.cftc.gov/PressRoom/PressReleases/8450-21.