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The United States Securities and Exchange Commission (SEC) ramped up its focus on the digital asset industry in 2022, with a new report revealing that its enforcement actions against\u00a0Bitcoin<\/a>\u00a0companies shot up 50% last year.<\/p>\n The report by consulting firm Cornerstone Research\u00a0revealed<\/a>\u00a0that the agency brought 30 enforcement actions against the industry, up from 20 in 2021. Of these, 24 were litigation actions, while six were administrative proceedings. The agency also filed two follow-on actions, two delinquent filing orders, and one stop order.<\/p>\n \u201cThe SEC has sharpened its focus on cryptocurrency lending and trading platforms and decentralized finance platforms. As Chair Gensler has noted, the \u2018runway is getting shorter\u2019 for crypto intermediaries to register with the SEC. This could lead to more enforcement actions coming from the SEC,\u201d\u00a0commented<\/a>\u00a0Simon Mola, the report\u2019s author.<\/p>\n The SEC\u2019s renewed focus on the digital asset industry under the stewardship of Chairman Gary Gensler became clear in May last year when it renamed its\u00a0Crypto Assets and Cyber Unit<\/a>\u00a0and doubled the headcount. This would allow the agency to \u201cpolice wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity,\u201d Gensler stated at the time.<\/p>\n According to Cornerstone\u2019s report, the agency charged 79 defendants last year, 56 being individuals and 23 being virtual asset service providers (VASPs). The consulting firm noted that the SEC had shifted its focus to individuals under Gensler\u2019s leadership. Pre-Gensler, actions against individuals accounted for a mere 20%. However, in 2021 they accounted for 35% and 50% last year.<\/p>\n Gensler is cleaning out the\u00a0initial coin offering<\/a>\u00a0(ICO) rot in the industry, with close to half of last year\u2019s actions relating to ICOs.<\/p>\n Last year also saw the SEC bring the first insider trading actions against a digital asset industry participant. As CoinGeek\u00a0reported<\/a>, the agency filed an action against Ishan Wahi, accusing him of using insider information to trade tokens ahead of their listing on Coinbase (NASDAQ:\u00a0COIN<\/a>). Wahi was a product manager at the exchange.<\/p>\n The SEC first brought an action against a digital asset industry participant in 2013, and since then, it has racked up $2.61 billion in total monetary penalties. Last year, it collected $242 million.<\/p>\n \u2018Toothless\u2019 Gensler still not doing enough<\/strong><\/p>\n While the SEC has ramped up its actions against scammers,\u00a0frauds<\/a>, and non-compliant companies in the crypto sector, many feel it has failed in its mandate to protect investors. In most actions, the SEC has only acted after a company has imploded or billions of dollars have been lost.<\/p>\n Just recently, the regulator only sprung to action after\u00a0FTX<\/a>\u00a0was revealed to be comingling users\u2019 assets with its own, lending to its subsidiaries, and making risky bets through which it lost billions of dollars.<\/p>\n Gensler has been criticized by many for failing to uncover the scams before they went up in smoke.<\/p>\n One of his fiercest critics is Sen. Elizabeth Warren (D-Mass.), the digital currency skeptic who, in an\u00a0editorial<\/a>\u00a0for the Wall Street Journal, stated that \u201cpower is worthless if the cop on the beat won\u2019t use it.\u201d<\/p>\n Others like Rep. Jim Himes (D-Conn.) have concurred, claiming that Gensler seems clueless on how to protect digital asset investors.<\/p>\n \u201cI asked him specifically what the next steps are. It\u2019s not clear to me what the answer is there\u2026We don\u2019t have a clear plan to solve the problem of noncompliance,\u201d Himes stated after Gensler appeared before the House Financial Services Committee.<\/p>\n For Gensler, the solution might lie in working with other agencies to police the industry. According to the Cornerstone report, since 2013, \u201cthe SEC has received assistance from outside agencies and organizations in 56 actions (44%).\u201d<\/p>\n This interagency cooperation, however, has been hindered by the infighting for supremacy, with Gensler in a tug-of-war with the CFTC for\u00a0jurisdiction over the digital asset industry<\/a>.<\/p>\n Watch: Law & Order \u2013 Regulatory Compliance for Blockchain & Digital Assets<\/p>\n