by Stephan Schlegelmilch, Ezra Newman, and Cameron Wolfe
From left to right: Stephan Schlegelmilch, Ezra Newman, and Cameron Wolfe
The recent wave of bankruptcies in the crypto industry, culminating in the collapses of Celsius, BlockFi, and FTX, has spurred financial regulators to adopt a more aggressive tone when discussing their enforcement priorities.[1] For instance, when announcing charges against FTX Founder Sam Bankman-Fried (“SBF”) for allegedly orchestrating a scheme to defraud FTX’s equity investors,[2] Securities and Exchange Commission (“SEC”) Chair Gary Gensler trumpeted that the charges were a “clarion call to crypto platforms that they need to come into compliance with our laws.”[3] Chair Gensler went on to threaten platforms that do not comply with the SEC’s interpretation of the securities laws, stating that “the SEC’s Enforcement Division is ready to take action.”[4]