Crypto-Enforcement Around the World

Abstract

The blockchain revolution in capital and financial markets attracted the attention of enforcement agencies in many jurisdictions. This Article elaborates the results of an international enforcement survey of the Blockchain and Fintech Research Program of the Rutgers Center for Corporate Law and Governance. It provides a detailed analysis of enforcement in major crypto-market jurisdictions. The data suggest that, despite an extended network of agreements facilitating international cooperation, the United States Securities and Exchange Commission (“SEC”) maintains its historically active enforcement posture. The SEC brings more enforcement actions against cryptoasset issuers, broker-dealers, crypto-exchanges, and other digital-asset market participants than most other major crypto-jurisdictions, as well as the United States Commodity Futures Trading Commission. SEC enforcement results in considerably more serious penalties.

Our data raise theoretical questions on regulation via enforcement, its effect on financial innovations, and regulatory competition. The U.S. does not have a separate regulation designed for the decentralized ledger technology industry and related financial markets, which effectively creates a pure regulation via enforcement environment. To the extent that the U.S. agencies pursue actions not only against domestic companies but also foreign firms, which raise only part of their capital from United States investors, their actions impact global crypto-markets and raise regulatory competition concerns.

Keywords: blockchain, cryptoassets, digital assets, virtual assets, enforcement, commodity regulation, securities regulation, comparative law, international, capital markets, financial regulators