But through the several regulatory requirements for crypto activities, many uncertainties are gradually manifesting. On the part of investors, developers, and service firms, many lament the height of crypto regulatory uncertainty for their operations.
While crypto regulations could be seen as a great measure, especially for increased protection, there seem to be other sides. Their uncertainties are forming clogs in different dimensions. For example, some legal experts’ statements categorize such regulatory uncertainties as aids to lawsuits.
According to Tuesday’s published analysis on Law360, lawyers from Choate Hall and Stewart LLP voiced their observations. Some lawyers include Alex Bevans, Diana Lloyd, and Mike Gass. They stressed the hike on how applications of prevailing laws have formed litigating weapons against crypto users and investors. In the observation, this trend is only increasing rapidly.
The authors of the analysis called on the attention of crypto traders, users, and even related platforms. They urged these participants to note the rising trend in litigation and enforcement through the present regulatory environment. Also, the authors commented that the spike is likely happening through unpredictable patterns.
Litigations and Enforcement From Regulatory Bodies Towards Crypto
While elaborating the points, the lawyers mentioned some instances of litigations concerning digital coins regulations; for example, there’s the case of persecution against a U.S. citizen for sanction violation through crypto use. In addition, on the part of the SEC, the agency has taken many lawsuits over the years. Also, there are increasing private litigations and class actions on crypto-related issues.
Recall that the U.S. Department of Justice (DOJ) issued its first criminal complaint in May. This was directed against an anonymous U.S. citizen via the U.S. District Court for the District of Columbia. The complaint was based on violating sanctions through digital coins’ use under the International Emergency Economic Powers Act (IEEPA).
In February, a case was against BlockFi, a digital lending firm. The platform got a fine of $100 million for failure to register its lending products as the law demanded.
Additionally, the lawyers cited the SEC’s lawsuits against the provision of unregistered securities as crypto tokens. The first was against Ripple Labs Inc., the creator of Ripple (XRP) of 2020. The second was a 2021 case lawsuit against LBRY, a DeFi content sharing platform.
According to the lawyers, the SEC’s actions cut across both bigger and smaller projects. Moreover, with the operation of the SEC and DOJ, the lawyers see a future with increased enforcement moves.