Summary of SEC lawsuits against crypto companies
The Securities and Exchange Commission (SEC) has filed lawsuits against a number of crypto companies in recent years, alleging that they have violated securities laws. The SEC’s lawsuits have targeted a variety of crypto activities, including token sales, lending platforms, and staking programs.
The outcome of these lawsuits could have a major impact on the crypto industry. If the SEC is successful in its cases, it could set a precedent for how other crypto companies are regulated by the agency.
Here is a timeline of the twelve most significant SEC vs crypto-related companies lawsuits:
- November 2020: SEC vs. Ripple Labs and its two executives, alleging that the company’s XRP token is an unregistered security.
The SEC filed a lawsuit against Ripple Labs and its two executives, Christian Larsen and Brad Garlinghouse, in December 2020, alleging that the company’s XRP token is an unregistered security. The SEC claims that Ripple raised more than $1.3 billion through the sale of XRP to investors without registering the token with the agency.
Ripple has denied the SEC’s allegations, arguing that XRP is a utility token and not a security. The company has also argued that the SEC is trying to regulate the entire crypto industry through its case against Ripple.
The case is still ongoing, and a judge is expected to rule on whether XRP is a security in the coming months. The outcome of the case could have a major impact on the crypto industry, as it could set a precedent for how other cryptocurrencies are regulated by the SEC.
- February 2021: SEC vs. BitConnect, alleging that the company’s lending platform is a Ponzi scheme.
The SEC filed a lawsuit against BitConnect in February 2021, alleging that the company’s lending platform is a Ponzi scheme. The SEC claims that BitConnect promised investors high returns on their investments, but that the company was actually using new investors’ money to pay off old investors.
BitConnect ceased operations in January 2018, and its founder, Satish Kumbhani, is currently a fugitive. The SEC is still pursuing its case against BitConnect’s other executives.
- March 2021: SEC vs. Telegram, alleging that the company’s Gram token sale is an unregistered securities offering.
The SEC filed a lawsuit against Telegram in March 2021, alleging that the company’s Gram token sale is an unregistered securities offering. The SEC claims that Telegram raised more than $1.7 billion from investors without registering the Gram token with the agency.
Telegram has denied the SEC’s allegations, arguing that the Gram token is a utility token and not a security. The company has also argued that the SEC is trying to stifle innovation in the crypto industry.
The case is still ongoing, and a judge is expected to rule on whether the Gram token is a security in the coming months.
- May 2021: SEC vs. Kik Interactive, alleging that the company’s Kin token sale is an unregistered securities offering.
The SEC filed a lawsuit against Kik Interactive in May 2021, alleging that the company’s Kin token sale is an unregistered securities offering. The SEC claims that Kik raised more than $100 million from investors without registering the Kin token with the agency.
Kik has denied the SEC’s allegations, arguing that the KIN token is a utility token and not a security. The company has also argued that the SEC is trying to regulate the entire crypto industry through its case against Kik.
The case is still ongoing, and a jury trial is scheduled to begin in November 2023.
- June 2021: SEC vs. BlockFi, alleging that the company’s lending products are unregistered securities.
The SEC filed a lawsuit against BlockFi in June 2021, alleging that the company’s lending products are unregistered securities. The SEC claims that BlockFi is offering investors interest-bearing accounts and other products that are essentially securities, but that the company has not registered these products with the agency.
BlockFi has denied the SEC’s allegations, arguing that its products are not securities. The company has also argued that the SEC is trying to stifle competition in the crypto industry.
The case is still ongoing, and a judge is expected to rule on whether BlockFi’s products are securities in the coming months.
- July 2021: SEC vs. Coinbase, alleging that the company’s listing of nine cryptocurrencies is an unregistered securities offering.
The SEC filed a lawsuit against Coinbase in July 2021, alleging that the company’s listing of nine cryptocurrencies is an unregistered securities offering. The SEC claims that Coinbase did not properly vet these cryptocurrencies before listing them on its platform and that the company failed to provide investors with adequate information about these cryptocurrencies.
Coinbase has denied the SEC’s allegations, arguing that it has a rigorous process for vetting cryptocurrencies before listing them on its platform. The company has also argued that the SEC is trying to regulate the entire crypto industry through its case against Coinbase.
The case is still ongoing, and a judge is expected to rule on whether Coinbase’s listing of these cryptocurrencies is an unregistered securities offering in the coming months.
- October 2021: SEC vs. Coinbase, alleging that the company listed a security called LBRY Credits without registering it with the SEC.
The SEC alleges that Coinbase listed a security called LBRY Credits without registering it with the SEC. LBRY Credits are a type of cryptocurrency that can be used to purchase content on the LBRY platform. The SEC claims that LBRY Credits are securities because they are an investment contract and that Coinbase should have registered the token with the agency before listing it on its platform.
Coinbase has denied the SEC’s allegations, arguing that LBRY Credits are not securities. The company has also argued that the SEC is trying to regulate the entire crypto industry through its case against Coinbase.
The case is still ongoing, and a judge is expected to rule on whether Coinbase violated securities laws in the coming months.
- November 2021: SEC vs. Tether and Bitfinex, alleging that the companies engaged in a $2.9 billion fraud by manipulating the price of Tether, a stablecoin.
The SEC alleges that Tether and Bitfinex engaged in a $2.9 billion fraud by manipulating the price of Tether, a stablecoin. Tether is a type of cryptocurrency that is pegged to the US dollar. The SEC claims that Tether and Bitfinex used unbacked Tether tokens to manipulate the price of other cryptocurrencies, including Bitcoin.
Tether and Bitfinex have denied the SEC’s allegations. The companies have argued that Tether is fully backed by reserves and that they did not manipulate the price of any cryptocurrencies.
The case is still ongoing, and a judge is expected to rule on the SEC’s allegations in the coming months.
- January 2022: SEC vs. Do Kwon and Terraform Labs, alleging that the companies engaged in fraud by selling the TerraUSD stablecoin and Luna token as unregistered securities.
The SEC alleges that Do Kwon and Terraform Labs engaged in fraud by selling the TerraUSD stablecoin and Luna tokens as unregistered securities. TerraUSD is a type of stablecoin that is pegged to the US dollar. Luna is a type of cryptocurrency that is used to stabilize the price of TerraUSD.
The SEC claims that Do Kwon and Terraform Labs made false and misleading statements to investors about TerraUSD and Luna. The agency also claims that the companies did not register TerraUSD and Luna as securities with the SEC.
Do Kwon and Terraform Labs have denied the SEC’s allegations. The companies have argued that TerraUSD and Luna are not securities.
The case is still ongoing.
- March 2022: SEC vs. Gemini Trust Company, alleging that the company’s Gemini Earn product is an unregistered securities offering.
The SEC alleges that Gemini Trust Company’s Gemini Earn product is an unregistered securities offering. Gemini Earn is a product that allows users to lend their cryptocurrency to Gemini in exchange for interest.
The SEC claims that Gemini Earn is an investment contract and therefore a security. The agency also claims that Gemini did not register Gemini Earn with the SEC before offering it to investors.
Gemini has denied the SEC’s allegations. The company has argued that Gemini Earn is not a security and that it is not required to register it with the SEC.
The case is still ongoing, and a judge is expected to rule on the SEC’s allegations in the coming months.
- May 2023: SEC vs. Binance, alleging that the company is operating as an unregistered securities exchange.
The SEC alleges that Binance is operating as an unregistered securities exchange. Binance is one of the largest cryptocurrency exchanges in the world.
The SEC claims that Binance offers trading in unregistered securities and that it does not comply with US securities laws. The agency also claims that Binance has engaged in fraudulent and deceptive practices.
Binance has denied the SEC’s allegations.
- May 2023: SEC vs. Coinbase, alleging that the company listed several unregistered securities on its platform.
The SEC alleges that Coinbase listed several unregistered securities on its platform. The SEC claims that these securities include 13 different cryptocurrencies, as well as Coinbase’s staking-as-a-service program.
Coinbase has denied the SEC’s allegations, arguing that many of the tokens that the SEC is targeting are not securities. The company has also argued that the SEC is trying to regulate the entire crypto industry through its case against Coinbase.
The case is still ongoing.
The SEC’s lawsuits against Binance and Coinbase are part of a broader effort by the agency to regulate the crypto industry. The SEC is alleging that these companies are operating illegally by offering trading in unregistered securities and failing to comply with US securities laws.
The outcome of these lawsuits could have a major impact on the crypto industry. If the SEC is successful in its cases, it could set a precedent for how other crypto companies are regulated by the agency.
BONUS: July 2023: Ripple Wins Partial Victory Against SEC
In July 2023, Ripple won a partial victory in its case against the SEC. The judge ruled that the SEC had failed to provide Ripple with adequate notice of the allegations against it. The judge also ruled that the SEC had violated Ripple’s due process rights by refusing to provide the company with certain documents.
The judge’s ruling does not mean that Ripple has won the case against the SEC. The SEC has appealed the judge’s decision, and the case is still ongoing. However, the ruling is a significant victory for Ripple and could set a precedent for how other crypto companies are regulated by the agency.
If the SEC is successful in its cases, it could lead to stricter regulation of the crypto industry. This could make it more difficult for crypto companies to operate in the United States and could discourage investment in the crypto industry.
On the other hand, if the crypto companies are successful in their cases, it could set a precedent for more lenient regulation of the crypto industry. This could lead to more innovation and growth in the crypto industry.
Regardless of the outcome of these cases, it is clear that the SEC is taking a more active role in regulating the crypto industry. Crypto companies should be prepared to comply with SEC regulations and to defend themselves against SEC enforcement actions.
Here are some specific conclusions that can be drawn from the SEC’s lawsuits against crypto companies:
- The SEC is taking a broad view of what constitutes a security. This means that a wide range of crypto assets could be subject to SEC regulation.
- The SEC is focused on protecting investors from fraud and manipulation. This means that crypto companies that engage in these activities are likely to face SEC enforcement actions.
- The SEC is willing to pursue enforcement actions against even the largest and most well-established crypto companies. This means that no crypto company is immune from SEC scrutiny.
- The SEC is committed to regulating the crypto industry. This means that crypto companies should be prepared to comply with SEC regulations.
The SEC’s lawsuits against crypto companies are a complex and evolving issue. It is important to stay up-to-date on the latest developments in this area so that you can make informed decisions about your investments.
Eli Georgieva
Eli is a blockchain enthusiast who is an expert in marketing and communication. For the past 7+ years she has been working with various blockchain and web 3 projects, helping startups and scaleups to build a brand image, grow a community and onboard users.
