Cryptocurrency executives had hoped that 2023 would herald a new beginning after a year of disastrous setbacks. Instead, the industry has found itself on the receiving end of an aggressive government crackdown, the New York Times reported. Last month, the Securities and Exchange Commission levied fines and other penalties against crypto lending firms, while federal banking officials issued policy statements that appeared calculated to make it harder for crypto companies to participate in the mainstream finance system. In the last few days, the pace has accelerated. Two high-profile crypto firms — including a popular exchange where people buy and sell digital coins — came under intense pressure from state and federal regulators. After announcing a settlement with the exchange, the S.E.C. also fined a crypto promoter and sued a start-up that issued digital coins, for a total of three enforcements in just over a week. The actions are likely a prelude to a protracted spell of legal wrangling, as regulators respond to the market turmoil that caused prominent crypto companies to file for bankruptcy last year and cost investors billions of dollars. And the enforcement signals a growing urgency in Washington, D.C., to address the threat posed by cryptocurrencies, an experimental technology that enables new forms of financial speculation. For years, regulators were criticized for failing to come to grips with the crypto industry, even as it grew into a multitrillion-dollar business. In November, the FTX crypto exchange, once regarded as one of the most reliable firms in the freewheeling industry, failed practically overnight, and its founder, Sam Bankman-Fried, was charged with orchestrating a yearslong fraud. That put regulators under intense pressure to act. Crypto companies have long existed in a legal gray area, with legislators and government officials debating how they should be classified for regulation. The industry’s growth has outstripped the slow-moving federal bureaucracies that oversee the other parts of the finance industry, like traditional banks and publicly traded companies.
