A new analysis of crypto-related lawsuits has uncovered a 42% growth in claims associated with digital currency by 2022. The previous year saw the highest number of lawsuits in a 12-month period, with a total of 41 cases in the US. Further research found that many of the legal disputes originated from the US Securities and Exchange Commission (SEC).
Uptick in US Crypto Lawsuits Tracked Since 2018: Report
Much like the value cycles experienced by cryptocurrencies, the number of US cryptocurrency-related lawsuits filed each year has seen some fluctuations, according to fresh research from hedgewithcrypto.com. The study reveals that there has been a 40% increase in crypto cases between 2018-2022, but there have been some dips between peaks and troughs. Overall, 2022 saw the most lawsuits, with 41.
“In 2019, there was a 30% decline, as the number of lawsuits dropped from 30 to 21,” state the researchers at hedgewithcrypto.com. “This was then followed by an impressive rise of almost 62%, to 34 cases in 2020, before another dip to 28 in 2021. Finally, there was another surge (this time of more than 46%) in 2022, with 13 cases more than in 2021.”
Of the 41 crypto lawsuits in 2022, 19 cases were filed by the US Securities and Exchange Commission (SEC), America’s top securities regulator, against unregistered providers and securities. The majority of lawsuits in the crypto space have been those involving unregistered providers and securities, with 53 such cases since 2018. Initial Coin Offerings (ICOs) fraud was the reason behind 12 lawsuits. Theft or fraud has been the cause of 10 lawsuits since 2018.
Eight lawsuits were brought against nondisclosure and unlawful promotion of cryptocurrency. Five of the total number of cases were based on false or misleading statements about certain crypto products. “The nondisclosure of payment for the promotion of crypto products is one of the most notorious crypto-related lawsuits, often featuring celebrities,” the research concludes.
For example, the Emax Promotional case featuring Kim Kardashian SEC generated more than 50,000 articles on the subject, which were indexed in the Google Search engine. Misrepresentation of company earnings and pyramid scheme fraud has been the topic of a small number of lawsuits in the last five years. Hedgewithcrypto.com researchers compiled data from US SEC lawsuits, Stanford Law.
What do you think is driving the rising number of cryptocurrency-related lawsuits in the US? Do you believe SEC regulatory actions are important for a business’s success or do they impede innovation? Please share your thoughts with us via the comment box below.
