US Crypto Lawsuits Reach All-Time High With 42% Increase in 2022; SEC Cases Dominate Legal Battles
A new study on digital currency-related lawsuits since 2018 shows a 42% increase in crypto lawsuits in 2022. The highest number of claims in a single year was recorded last year, with 41 total claims in the United States. The research also shows that the majority of lawsuits came from the U.S. Securities and Exchange Commission (SEC).
Rise in U.S. Crypto Lawsuits Tracked Since 2018: Report
Similar to the price cycles experienced by cryptocurrencies, there are fluctuations in the number of U.S. crypto-related lawsuits filed each year, according to new research published by hedgewithcrypto.com. The study notes a 40% increase in crypto lawsuits between 2018 and 2022, but there have been some decreases between the highs. Out of all the years, 2022 saw the highest number of lawsuits in the United States, with a total of 41.
“In 2019, there was a 30% decrease as the number of lawsuits dropped from 30 to 21,” the hedgewithcrypto.com researchers explain. “This was followed by a dramatic increase of just under 62%, to 34 cases in 2020, before another drop to 28 in 2021. Finally, there was another increase (this time of over 46%) in 2022, with 13 more cases than in 2021.”
Approximately 19 of the 2022 crypto lawsuits originated from the U.S. Securities and Exchange Commission (SEC), as the country’s top securities regulator has been cracking down on unregistered services and securities. Throughout the years, lawsuits related to unregistered services and securities have been the most common in the crypto industry, totaling 53 lawsuits since 2018. Initial coin offering (ICO) fraud accounted for 12 lawsuits, while theft or fraud equated to 10 lawsuits since 2018.
Non-disclosure cases or the unlawful promotion of a cryptocurrency accounted for eight lawsuits, while making false and misleading statements about a crypto product represented five of the total over the last five years. “Non-disclosure of payment for the promotion of crypto products is one of the most infamous cryptocurrency-related lawsuits, often involving celebrities,” the research says.
For instance, the Emax promotion case involving Kim Kardashian and the SEC generated over 50,000 articles about the subject recorded on Google’s search engine. The fewest lawsuits in the past five years were related to falsifying company revenue and pyramid scheme fraud. Hedgewithcrypto.com researchers compiled the U.S. lawsuit data from the SEC and suits recorded by Stanford Law.
What do you think is driving the increasing number of crypto-related lawsuits in the U.S.? Do you believe that regulatory action by the SEC is necessary for the industry to thrive, or does it stifle innovation? Share your thoughts in the comments below.