The crypto crackdown begins

Some folks who had it easy for a long period have had a difficult few of months. The suspected criminal activities of an increasing number of bitcoin enterprises may finally be having some repercussions.

The Securities and Exchange Commission accused 11 individuals on Monday for running Forsage, which they described as a $300 million Ponzi scam disguising itself as a smart contract system. Less than a week prior, the New York Times reported that the Treasury Department was looking into cryptocurrency trading site Kraken for allegedly breaking US sanctions on Iran. And only a few days before, three former Coinbase workers were charged with insider trading by the FBI and the US district attorney in New York. John Reed Stark, a cybersecurity expert says:

The SEC is in the midst of a continuing onslaught against crypto firms from every direction

Thus, despite the fact that it is hot outdoors, we are currently experiencing a crypto winter that may never end. The bitcoin market exploded to $3 trillion during the epidemic, driven by new platforms that made investment simple enough for just about everyone. The market, however, has fallen precipitously since late November. There is little indication that the value will increase greatly any time soon; it is now only worth approximately a third of what it was at its height. Some of the businesses in this industry have been destroyed by the crisis, and so have their clients.

The law is now advancing against several cryptocurrency businesses and their executives. But it's unclear exactly what repercussions, if any, many of these businesses and the individuals behind them will experience.

When crypto lending platforms fail, unlike with traditional banks, there are no safeguards in place to guarantee that investors are made whole. Customers of Celsius and Voyager, two cryptocurrency loan services that filed for bankruptcy in July, may never see their money again. It has also been shown that certain apparently secure cryptocurrency investments known as "stablecoins," which are linked to the value of a fiat currency like the US dollar, are not at all stable.

According to Matt Binder, a Mashable writer who also presents Scam Economy, a podcast about cryptocurrency and Web3 frauds, "With so much fresh money driving up token values, so many people wanted in without understanding anything about the area." And a lot of those individuals were exploited by the industry.

In the upcoming months and years, according to Stark, we'll likely see more action taken against these cryptocurrency companies, with the SEC concentrating its efforts on the gatekeepers they use for their scams rather than the small-time con artists: "trading exchanges, platforms, whatever you want to call them." And he believes that it will receive a lot of assistance, perhaps from those who work inside the crypto industry, along with any other agency looking into it.

"You do have folks who want to be whistleblowers or they become complainants when firms start indulging in this type of behavior," Stark added. "And individuals may turn into informants very fast when criminal prosecutors start poking around," said the author.

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