Analytics Reveal Inside Look at Securities Regulators Dueling Over Crypto

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are the two regulatory bodies that govern the American stock market and related trading. Created with the Securities Exchange Act of 1934, the SEC regulates Initial Public Offerings and subsequent stock trades. Primarily, it focuses on the disclosures companies make to investors about the status of their business. The CFTC was created with the Commodity Futures Trading Commission Act of 1974, and it oversees derivatives markets. 

Interestingly, the two have been at odds over which agency should regulate cryptocurrencies. While both agencies agree that cryptocurrencies like Bitcoin and Etherium are not securities, the SEC seems to have a greater appetite for regulating the market. 

These analyses examine the suits the two agencies have brought under the Nature of Suit code 850 Securities/Commodities/Exchange from 2019 through October 2023.


Far and away the most active party in securities litigation is the SEC. The agency, alone, explains 22% of the variance in monthly securities cases. Most notably, they consistently file the most new cases in September, before a precipitous dropoff in October. December, March, and June also see peaks.

The plurality of these cases were filed in the Southern District of New York, followed by the Central District of California, the Southern District of Florida, the Northern District of California, and the Eastern District of New York. 

While some of their cases have been drawn out for years and have included over a thousand filings, their modal case lasts less than two months, has less than twenty filings, and ends in one or more consent judgments.

Far and away the most common resolution for the SEC’s cases is the defendant or defendants taking a consent judgment. Also, quite a few cases filed since 2019 are yet unresolved. Of all the cases filed in the aforementioned time period, four have been heard before a jury. Of those five, four resulted in a decision in favor of the SEC. In fact, of the 810 cases that have a resolution, the SEC dismissed charges in 14 cases, had a judge rule against them in one case, and had a jury rule against them in the one case already discussed. It should be noted, however, that a case can have more than one resolution if, for example, some defendants took a consent judgment and others were ruled against by the judge. Additionally, 50 cases were stayed till the resolution of an ongoing criminal case, and 26 were administratively opened and closed as they were placeholder cases for the distribution of disgorgement of resources won by the SEC to different judicial districts. 

It should be noted, however, that the SEC’s impressive win rate does not necessarily signify the agency is effectively regulating the stock market. 

*The SEC often cites Section a3 of the Investment Company Act.

The slight majority of cases filed by the SEC were done so under the U.S. Code 15:77 which includes the Securities Act of 1933. This provision governs the disclosures sellers of securities must make to investors. Roughly a quarter of the SEC’s cases were filed under U.S. Code 15:78m(a) which provides more specifics regarding reporting standards than 15:77. About 10% of cases were filed under the U.S. Code 12:22 which governs how banks and trusts may deal in securities.


The Commodity Futures Trading Commission has been far less litigious than the SEC, though they also are the most active in September. Their cases also do not significantly differ in outcome. Their cases also do not differ from the SEC’s in the number of filings per case, however controlling for filings, their cases run, on average, 90 days longer. 

As to the districts the CFTC prefers, the plurality of their cases have been filed in the Southern District of New York, followed by the Northern District of Illinois, the Southern and Middle Districts of Florida, and the Northern and Southern Districts of Texas.

The majority (60%) of the CFTC’s cases were filed under U.S. Code 7:6(b) which covers relations of US persons with foreign boards of trade.