STATEMENT: TAF Coalition Urges SEC to Sustain Strong Crypto Fraud Enforcement
Washington, DC — This week, The Anti-Fraud Coalition (TAF Coalition) urged the Securities and Exchange Commission’s (SEC) Crypto Task Force to recommend continued robust enforcement of securities fraud involving digital assets. In a letter to the Task Force, TAF Coalition emphasized the central role whistleblowers play in uncovering crypto fraud and called on the SEC to allocate sufficient resources to this critical work.
“Crypto may be novel, but the fraud is all too familiar,” said Jacklyn DeMar, President and CEO of the TAF Coalition. “The SEC must remain at the forefront of protecting investors from fraudsters exploiting this evolving sector.”
Whistleblowers Are Key to Enforcement Success
The letter highlights how whistleblowers have helped the SEC uncover and prosecute fraud in the crypto space. In 2024, 8% of tips to the SEC whistleblower program were categorized as related to initial coin offerings or crypto asset securities.
Since the whistleblower program’s inception, information provided by whistleblowers has led to more than $6.3 billion in sanctions and the return of over $1.5 billion to harmed investors.
Rampant Crypto Fraud Demands Strong Oversight
TAF Coalition points to recent data showing that illicit activity involving cryptocurrencies topped $40 billion in 2024, including manipulation tactics like pump-and-dump schemes, wash trading, and front running. Despite this, many fraudsters appear to believe crypto markets are easier to exploit than traditional finance.
“Fraudsters are taking advantage of crypto’s opacity and lack of oversight,” said DeMar. “The SEC has both the authority and expertise to disrupt these schemes and protect investors.”
Recommendations for SEC Action
TAF Coalition recommends the Task Force advise the SEC to:
– Affirm that some digital assets are securities; and
– Ensure the agency devotes adequate resources to enforcing securities laws in the crypto sector.
While recognizing the roles of other agencies like the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ), TAF Coalition underscores that the SEC is uniquely positioned to lead civil enforcement. The SEC’s enforcement capacity significantly exceeds that of the CFTC, which lacks the staffing to pursue all promising leads.
Standing Ready to Assist
TAF Coalition reaffirmed its commitment to supporting the SEC’s anti-fraud mission.
“We and our members stand ready to support the agency in holding scammers accountable and keeping markets fair for everyone,” said DeMar.
This letter was drafted with assistance from Daren Firestone of Levy Firestone Muse and Andrew Feller of Kohn, Kohn & Colapinto.
Read the full letter below:
For more information on this topic, please contact James King, Director of Communications & Digital at [email protected].
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