Crypto Faces Mounting Legal and Regulatory Challenges After a Series of Rulings

March saw several legal blows against the crypto industry, including a 25-year prison sentence for Sam Bankman-Fried and rulings allowing SEC lawsuits against Coinbase and Terraform Labs to proceed.

Judges rejected arguments that cryptocurrencies are novel assets not covered by securities laws, stating they clearly fall under existing frameworks for identifying securities.

Terraform Labs and CEO Do Kwon were found liable for fraud related to the collapse of the stablecoin UST, which wiped out over $40 billion in market value.

Politicians are showing increasing interest in crypto regulation, but consumer advocates warn new rules could entrench risks rather than protect investors.

Crypto lobbying spending is rising rapidly, hitting nearly $20 million in the first 9 months of 2022, raising conflict of interest concerns around new legislation.