John Reed Stark, former Chief of the US Securities and Exchange Commission’s (SEC) Office of Internet Enforcement, has warned that the cryptocurrency industry should brace for more lawsuits.
In an interview with the Financial Times, Stark noted that the SEC is stepping up its efforts to enforce regulations in the crypto space, mainly when investor protection is at stake.
SEC Ramping Up Enforcement Actions
The SEC has recently launched a series of enforcement actions against prominent cryptocurrency companies such as Genesis, Gemini, Paxos, Kraken, and Binance.
The regulatory body is also engaged in a dispute with Grayscale, an asset manager seeking approval to convert its Bitcoin trust into a spot exchange-traded fund (ETF) that holds the cryptocurrency directly.
Stark argues that while investors may not appreciate the regulatory interventions, they are necessary for their protection, much like seatbelt laws.
Recent Lawsuit Results in $2.8 Million Settlement
In related news, a seven-month-long lawsuit between the SEC and Hydrogen Technology Corporation has concluded with the company and its former CEO, Michael Ross Kane, being ordered to pay $2.8 million in remedies and civil penalties.
The SEC had filed a complaint against the company in September of the previous year, alleging that Kane manipulated the volume and price of Hydrogen’s ERC-20 token, Hydro (HYDRO), through its market maker, Moonwalkers Trading Limited.
The $2.8 million settlement includes $1.5 million in disgorged profits, which refers to gains made from unlawful conduct, and a penalty of over $1 million.
Hydrogen CEO Michael Kane has also agreed to pay an individual fine of approximately $260,000, with the remaining amount consisting of prejudgment interest.
Source: https://coinpedia.org/news/crypto-vs-sec-get-intense-former-sec-chief-predicts-rise-in-lawsuits/