“Every two hours we hear about new enforcement measures,” Kristin Smith, executive director of the Blockchain Association, a cryptocurrency industry trade group, told The New York Times last February.

In addition to this, Paul Grewal, General Counsel of Coinbase, the largest cryptocurrency exchange in the US: “What is happening today is a concerted effort that spans many organizations and seems to reflect the consensus that limits should be put in place. for the entire cryptocurrency industry. . It is important for the cryptocurrency industry to prepare for the long battles.”

“There are many sheriffs in the city, and everyone is trying to seize control of the same city.”

“We are seeing competition between federal agencies in the US to show how tough they can be on crypto,” said Jason Weinstein, a lawyer at Steptoe & Johnson. “There are many sheriffs in the city, and everyone is trying to seize control of the same city.”

And they seem to be right: in 2023, at least in the US, the authorities are rushing to clean up an entire industry that emerged in the early 2010s as a cross between a new era of investment, a radical departure from the mainstream financial system, and a space for money laundering. for illegal activities. Of course, the so-called blockchain, although it consists of encoded elements that are completely incomprehensible at first glance, functions as a record of transactions made with cryptocurrencies.

They hoped for 2023

The familiar post-2022 industry, as it struggled to regain lost trust and shine again, saw this year as a period of “abstinence.” According to the NYT, the fall in the price of cryptocurrencies is part of a wider investor retreat from risky assets, caused by rising interest rates, inflation and economic uncertainty caused by Russia’s invasion of Ukraine. These factors have contributed to the so-called pandemic hangover that began as life began to return to normal in the United States, hurting the stock prices of companies like Zoom and Netflix that have flourished during the lockdown.

Cryptocurrency companies, however, have settled without a hotelier for 2023, as the relevant authorities crack down not only on the companies, but also on those who promote their products – mainly celebrities and Internet influencers, who were often forced to pay exorbitant amounts for them. advertising a cryptocurrency company without claiming they were compensated for it (Kim Kardashian and Lindsay Lohan are just two cases out of dozens).

“Bad” 2022

It wasn’t until 2022 that bitcoin was crushed by the fall of its cryptocurrency; Coinbase, the so-called cryptocurrency exchange, has fallen in price. Cryptocurrency, once a stable medium of trade and exchange, has collapsed, and more than $300 billion has disappeared due to the collapse in cryptocurrency prices, according to a New York newspaper.

The SEC, the U.S. Securities and Exchange Commission, is no longer kidding, as it penalizes any company or person that commits acts that go beyond the established rules. At the same time, financial institutions are tightening the conditions for participation in the mainstream financial system, and a cryptocurrency detective startup called Chainalysis has already been created, consisting of a group of blockchain analysts who help the government track cryptocurrency transactions.

This aggressive policy of the authorities led to the collapse of FTX last November – after investors withdrew $ 6 billion from the platform within three days – and accusations of its head Sam Bankman-Fried of a number of criminal acts, including repeatedly lying to his clients about the structure of his business and how he managed the billions of dollars that his clients deposited on his stock exchange.

The bankruptcy of FTX and the scandals that followed it were another fuse for events.

As K wrote, the platform in question did not even have the elementary and necessary financial and accounting control, and in its compartments did not allow the expression of any opposing opinion or disagreement. In fact, the Bloomberg report spoke of “shame, greed and incompetence” on the part of FTX executives, who even joked among themselves about the whereabouts of the millions of dollars the company traded. In fact, on the day it filed for bankruptcy, perhaps because of Sam Bankman-Freed’s controversial investment, the company didn’t even have a complete and up-to-date list of employees working for it.

After the FTX, the US Securities and Exchange Commission targeted Nexo, fining it more than $40 million. The allegation, which the company denied, although it agreed to settle, was that Nexo allowed US customers to convert their savings into cryptocurrencies and earn interest on those funds without first registering as a company offering the related services.

And the Capital Market Commission did not give up. He accused two companies, Genesis and Gemini, of raising billions of dollars in assets from hundreds of thousands of investors without being registered on the securities register.

The hunt for power intensifies

The hunt for illegal cryptocurrency companies in 2023 seems to be intensifying and the US authorities are not joking, especially after the repeated collapses of companies last year and thousands of investors who were left with … joy, and company executives bought country houses, expensive cars and turned into arrogant nerds .

Already at the beginning of the year, the Securities and Exchange Commission forced the Kraken cryptocurrency exchange to remove one of its popular investment products from the US market, and in February, the same agency sued Terraform Labs, the company that developed the Luna and TerraUSD digital currencies, which collapsed last year. in the spring and provoked a larger collapse in cryptocurrency prices, according to the NYT.

In fact, in the case of the digital currencies Luna and TerraUSD, which contributed to the collapse of the cryptocurrency market in 2022, their creator Dong Kwon was arrested in Montenegro last March while boarding a plane to Dubai with fake Costa Rika travel documents, as he was considered a fugitive. He was extradited to the US, where he was charged with eight counts of running Terraform Labs, the company behind the Luna and TerraUSD digital currencies, fraud and conspiracy to manipulate the market.

In the same days, the Commission announced that it had reached a settlement with former NBA star Paul Pierce, forcing him to pay $1.4 million for what, according to the indictment, he was selling cryptocurrencies without the necessary public announcements.

Last Monday, June 5, it was the turn of the popular Binance, the world’s largest cryptocurrency exchange, for the second time. The tireless Securities and Exchange Commission accused him of mismanaging client funds and misrepresenting his transactions to US regulators and investors.

Binance, Coinbase, Kraken, and Terraform Labs are companies targeted by authorities in the first half of 2023.

Regulators, according to the NYT, have long made Binance, which has said it has an average daily trading volume of $65 billion, a major target in their quest to take full control of the cryptocurrency industry, which they accuse of a deranged mentality.

Binance, for its part, said it received the indictment as its executives tried to negotiate a settlement with regulators.

“We contend that Zhao and the Binance companies were not only aware of the rules, but at the same time deliberately chose to evade them and put their clients and investors at risk,” said Gary Grul, director of the Capital Market Commission.

However, for two months now, the company has been under close scrutiny by the authorities, who have been accused of violating international anti-money laundering rules and trying to find loopholes in the rules of the countries where it operates.

Yesterday, Tuesday, was Coinbase day. One of the largest cryptocurrency trading platforms in the US is accused of violating the law by refusing to register as a service provider.

Again, the SEC found that the company was well aware of the rules and ignored them. “Coinbase has put its interest in growing its profits ahead of the interests of investors and compliance with the laws and regulatory framework governing the securities markets, and was created to protect investors and the US capital market,” the Commission notes in its lawsuit.

Celebrities and influencers who… took part

Naturally, it would be impossible for companies operating in the cryptocurrency industry not to seek influential help from the stars of the Internet, but not only this one. And they… intervened.

Lindsay Lohan was paid $10,000 to advertise Tron but didn’t declare it. He was forced to pay a tenfold fine.

The same thing happened to Kim Kardashian, who was forced to pay $1.26 million in compensation for allegations that she withheld her compensation.

Music producer DJ Khaled was found to have been paying around $150,000 after the Securities and Exchange Commission discovered he hid a $50,000 payment from Centra Tech, whose services he advertised.

However, in the game of advertising cryptocurrencies, but in completely legal ways, Matt Damon also stepped in with advertising energy for Crypto.com, and Reese Witherspoon also wrote a tweet in late 2021 stating that cryptocurrencies are here to stay.

Paris Hilton went even further… She named her dogs Crypto and Ether, explaining that their names are “an ode to my passion and love for #NFT.”

The authorities, however, at the international level, but especially in the US, will not stop, apparently, to dust off every company, person or… advertiser of cryptocurrencies. They are determined to set limits and rules, to decipher the industry and its blockchain, and above all to limit, as far as possible, the freedom of movement offered by a currency whose first component is “crypto”.