Lawsuits related to cryptocurrency in US almost double in a year
Lawsuits involving cryptocurrency disputes in the US increased by nearly fifty per cent throughout 2022.
According to research by crypto platform HedgewithCrypto, lawsuits from both the Securities and Exchange Commission (SEC) and other class action suits in 2022 saw a dramatic increase of 46 per cent.
2022 had the most crypto-related lawsuits ever, with a total of 41 being filed. Nineteen of these were filed by the SEC and 22 came in the form of class-action securities lawsuits.
The most recent scandal occurred in December following the collapse of the FTX trading platform, with former CEO Sam Bankman-Fried currently being on $250 million bail while facing various charges that could result in a maximum sentence of 115 years in prison.
2020 saw the second-largest amount of crypto lawsuits being filed since 2018, with a total of 34 and an increase of almost 62% from the previous year. As cryptocurrency was booming back in 2020, the value of Bitcoin rose from $7,175 on January 1 to $28,985 by New Year’s Eve – a staggering increase of more than 300%.
| Year | Number of Crypto Lawsuits Filed (Securities Class Action) | Number of Crypto Lawsuits Filed (Securities and Exchange Commission) | Increase/Decrease from the previous year (%) | Total number of Lawsuits filed |
| 2022 | 22 | 19 | 46.43% | 41 |
| 2020 | 12 | 22 | 61.90% | 34 |
| 2018 | 14 | 16 | 0.00% | 30 |
| 2021 | 11 | 17 | -17.65% | 28 |
| 2019 | 4 | 17 | -30.00% | 21 |
2018 saw a grand total of 30 crypto lawsuits being filed. Despite crypto usage being far less widespread than in 2021, a total of 30 SEC and class action lawsuits occurred in the United States, with a slight majority (16) being filed by the SEC.
A major case brought by the SEC in 2018 was against Paragon Coin inc due to a “legal mistake”. The legal mistake in question was an unregistered initial coin offering (ICO) of its digital tokens, which raised approximately $12 million from investors.
The research also discovered that:
- Unregistered crypto assets were the most common issue in crypto lawsuits filed by the SEC since 2018, with almost half of all lawsuits being related to this type of crime.
- Between 2018 and 2022 crypto lawsuits have increased overall by over 40%, with 30 lawsuits filed in 2018 compared to 41 in 2022.