Major Hurdles Facing Crypto in 2023: Legal Drama
By Manoj Dharra & Laxmikant Khanvilkar
It’s been a while since we took stock of the developments that shook the cryptocurrency world in the past and triggered regulatory actions. In 2022, TerraLuna and the FTX debacle caused the biggest shake-up in this space and created a ripple effect in the crypto space, and their aftermath continued in 2023 as well.
The recent developments are a grave reminder of those highly volatile and challenging days that forced authorities across the globe to spring into action and ensure regulatory enforcement.
As we approach the end of 2023, it’s time to take stock of the biggest stories, trends, and developments that have influenced changes in the blockchain industry.
As we scan down the events this year, one thing that has prominently surfaced is that blockchain has assembled an impressive cast of pantomime villains. Too often, “tech’s next big thing” purposefully hides the truth, enabling crimes to escalate into dramatic proportions before they are exposed.
Unfortunately, these crimes are seldom victimless and generate delayed responses until regulatory oversight and new legislation are introduced and adopted. As a result, arrests and private legal actions will scoop up the lion’s share of blockchain’s headlines in 2023. Let’s glance through these newsmakers quickly.
OneCoin and AirBit Club
The co-founders of two separate cryptocurrency scams—the multi-billion-dollar “OneCoin” scheme and “AirBitClub”—have each been sentenced to more than 10 years in prison, while regulators have charged the companies and executives of Coinbase and Binance—the biggest names in the blockchain ecosystem.
FTX Collapse
The collapse of one of blockchain’s biggest success stories, the formerly multibillion-dollar company FTX, has been further scandalised after the SEC issued severe criminal charges against Samuel Bankman-Fried’s (SBF) founder and other executives.
SBF was found guilty of seven criminal fraud counts tied to the collapse of his exchange and the theft of customer funds. His conviction landed on Nov. 2 after a month-long trial where he was convicted of five counts each carrying a maximum sentence of 20 years in prison and two further counts, carrying up to 5 years each.
Binance’s CZ pleads guilty
Less than three weeks later, on Nov. 21, Binance founder Changpeng Zhao (CZ) pleaded guilty to violations of the Bank Secrecy Act for failing to implement an effective anti-money laundering program and for willfully violating U.S. economic sanctions.
Gradually, the regulatory response is becoming more systemic and proactive, rather than simply reactive and targeted.
In the UK, there are new crypto marketing rules, and the EU has implemented its own regulatory framework, MiCA. Crypto’s legal Wild West phase is approaching its end, and the list is growing, which includes the UAE, Singapore, Hong Kong, etc.
Leveraging blockchain technology will have to be compliant with design moving forward. So is adhering to the rule of law. Any misuse or fraudulent activity may lead to increased legal action. I think the onus lies with the crypto exchange.
You need to login in order to Like
