A recent ruling by the U.S. Supreme Court states that the SEC cannot impose fines that exceed the profits obtained from illicit cryptocurrency-related activities.
Recently the Supreme Court of the United States ruled a ruling authorizing the SEC to request reimbursement of funds and profits obtained by companies or businesses through illegal activities. However, the Supreme Court's ruling prevents this reimbursement from being made for an amount greater than the profits obtained by the company or business during its activities; a verdict that also applies to companies that offer cryptographic and technology-based services. blockchain.
With this new Supreme Court ruling, the SEC now has new legal limitations when it comes to establishing its fines and penalties for those who have broken the law. The new Supreme Court ruling also prevents these penalties and fines from being imposed as punitive damages. Instead, it calls for them to be awarded to the benefit of victims of fraud or illegal activity.
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New limitations for the SEC
With the Supreme Court's ruling, the SEC is now limited to seeking the disgorgement of funds equivalent to the profits generated during irregular or illegal activities.
Similarly, the Supreme Court ruled that legitimate business expenses of a company accused of a crime must be deducted from the amount requested for repayment. The Court also established that if the SEC does not return all of the funds for repealing or canceling the accusations against a company, the funds must be returned to the investors; or, if applicable, a portion of said funds will be allocated to the United States Treasury fund. Even so, the lower courts may be able to evaluate whether the SEC carried out the appropriate processes for the benefit of the investors, if it does not return all of the funds.
The new limitations imposed by the Supreme Court of the United States on this government entity undoubtedly reduce its power to impose sanctions and recover resources beyond illegal funds. Even so, the limitations still allow the SEC to impose sanctions on those who commit financial crimes.
In this context, Chandler Costello, SEC spokesman, said that with the Supreme Court's new restrictions, the agency will still be able to catch criminals and deprive them of their ill-gotten gains. In addition, Costello said that they will be able to return the funds to their rightful owners, so the Court's ruling is aimed at ensuring fairness and justice within the organization's processes.
The Supreme Court ruling also applies to crypto companies and businesses
The Court's ruling applies to all those accused by the SEC of committing a financial crime. This includes companies or businesses that operate with cryptocurrencies or that offer services based on blockchain technology.
Now the companies that are under investigation by this entity, such as BitClave who sold unregistered securities during his ICO (Initial Coin Offering) will only have to return the amount of money produced illegally. In addition, the money recovered by the SEC in these fraud cases will be delivered to the victims in full.
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