A rise in the popularity of cryptocurrencies triggers moves by different jurisdictions to regulate digital assets. They see the need to control most activities within the space to secure investor funds. Therefore, many regulatory measures enter the crypto space.
But through the various regulatory requirements for crypto activities, many uncertainties are gradually manifesting. On the part of investors, developers and service companies, many lament the great regulatory uncertainty of cryptocurrencies for their operations.
While crypto regulations could be seen as a great measure, especially for greater protection, there seem to be other sides. Their uncertainties form clogs of different dimensions. For example, statements by some legal experts classify such regulatory uncertainties as litigation aids.
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Some lawyers from Choate Hall and Stewart LLP stated that there would be a growth in litigation and enforcement of crypto issues due to regulatory uncertainty.
According to analysis published Tuesday on Law360, attorneys at Choate Hall and Stewart LLP had their comments. Some attorneys include Alex Bevans, Diana Lloyd and Mike Gass. They emphasized the rise in how enforcements of existing laws have formed weapons of litigation against cryptocurrency users and investors. On observation, this trend is only increasing rapidly.
The authors of the analysis drew the attention of cryptocurrency traders, users, and even related platforms. They urged these participants to take note of the growing trend in litigation and enforcement through the current regulatory environment. Furthermore, the authors commented that the spike is likely to occur through unpredictable patterns.
Litigation and application of regulatory bodies towards crypto
In elaborating the points, the lawyers mentioned some cases of litigation related to digital currency regulations; For example, there is the case of persecution against a US citizen for violating a sanction through the use of cryptocurrencies. Also, on behalf of the SEC, the agency has initiated many lawsuits over the years. In addition, there are more and more private litigation and class action lawsuits over issues related to cryptocurrencies.
Recall that the United States Department of Justice (DOJ) issued its first criminal complaint in May. This was directed against an anonymous US citizen through the US District Court for the District of Columbia. The complaint was based on violation of sanctions by using digital currencies under the International Emergency Economic Powers Act (IEEPA).
In February, there was a case against BlockFi, a digital lending firm. The platform was fined $100 million for failing to register its loan products as required by law.
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Additionally, the lawyers cited SEC lawsuits against the provision of unregistered securities as crypto tokens. The first was against Ripple Labs Inc., the creator of Ripple (XRP) from 2020. The second was a 2021 lawsuit against LBRY, a DeFi content exchange platform.
According to the lawyers, the SEC’s actions encompass both large and small projects. In addition, with the operation of the SEC and the DOJ, lawyers see a future with greater enforcement measures.
Featured image from Agoda, chart from TradingView.com