SEC crypto clampdown puts digital asset industry on notice

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US markets regulators have put the crypto industry on notice, indicating that they will crack down on violations such as insider trading and fraud with the same vigour at which they pursue them in traditional finance.

In recent weeks the Securities and Exchange Commission has filed charges against individuals for allegedly creating a $300mn “fraudulent crypto pyramid and Ponzi scheme”, as well as a case against a former employee of crypto exchange Coinbase.

Officials at the agency, including its chair Gary Gensler, are wasting little time as this year’s turmoil in digital asset markets has left investors facing big losses. Although large swaths of the market are unregulated, the SEC is using pre-existing rules in traditional finance to police the crypto market.

“In traditional finance, these guys are under a microscope,” said Charley Cooper, managing director at blockchain firm R3 and former chief of staff at the…

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