Crypto Wells Notice Recipients 2024: Full List of Entities in SEC Crosshairs

• The SEC has initiated legal proceedings against six crypto firms this year.
• It has issued a further eight, with Wells’ notices warning that they are under investigation.
• The SEC issued two new Wells Notices in December, a month after the SEC chief announced his departure.

So far in 2024, the United States Securities and Exchange Commission (SEC) has instigated legal action against six digital asset businesses and issued Wells notices to seven more, warning that they are under investigation.

Despite SEC chief Gary Gensler announcing his departure from the agency the same day President-elect Donald Trump took office, the SEC continued to issue Wells Notices against crypto companies.

After Gensler announced his exit, the securities agency issued two Wells Notices in December against two crypto companies.

Seven Companies Accused of Unregistered Securities Offering/Trading

Since 2020, the SEC has filed over 40 complaints and cease-and-desist proceedings based on its claim that crypto assets are securities. Among the sea of enforcement actions, three lawsuits and five Wells notices allege unregistered securities offerings. The remaining charges levelled against crypto firms relate to securities fraud.

Such charges can generally be divided into two categories: those related to offering unregistered securities and those related to operating an unlicensed securities exchange.

In the latest case, the agency issued a Wells notice to CyberKongz . A Wells notice is the SEC’s way of informing a company that it is being investigated. However, the regulator isn’t obliged to warn firms before it brings charges, and in cases where fraud is suspected, it tends not to.

In a statement, CyberKongz noted that it will contest the SEC’s challenge.  The firm also emphasized the significance of opposing the SEC’s position for the good of the larger blockchain gaming community.

While they are a fairly good indicator of upcoming litigation, recipients of Wells notices aren’t obliged to disclose them. Therefore, there is always the chance that other crypto firms will be in the SEC’s crosshairs, but they have chosen not to publicize the fact.

Uniswap, Consensys, Robinhood, and Crypto.com have all asserted their innocence, arguing that the assets named by the SEC are not securities. Following a precedent established by Coinbase, Consensys, and Crypto.com even countersued the regulator.

Building on 2023’s Bumper Crop of Litigation

Although the SEC has been busy investigating the crypto sector in 2024, it will be difficult to top last year’s enforcement actions.

In 2023, the regulator filed lawsuits against 31 crypto firms it accused of violating US securities law.

Some of the most high-profile cases involve actions brought against crypto exchanges, including Beaxy, Bittrex, Binance, Coinbase, and Kraken. Meanwhile, litigation targeting Gemini, Nexo, and Celsius centers on crypto lending products.

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Charges alleging unregistered securities offerings were directed at the issuers of Tron (TRX), BitTorrent (BTT), SafeMoon, Blazar, and other cryptocurrencies.

NFT creators were also targeted. Extending the same logic it has applied to dozens of cryptocurrencies, in 2023, the SEC filed lawsuits against Stoner Cats and Impact Theory, alleging that they sold unregistered securities.