US regulators have issued a total of $2.5bn in penalties to various projects associated with the technology, according to a report by blockchain analytics company Elliptic.
Publishing the results of its comprehensive report on Monday, Elliptic argued that regulators have been onto blockchain and crypto projects since 2014.
In the covered period, an estimated $1.38bn in penalties were issued to unregistered securities offerings, similar to the case that the US Securities and Exchange Commission brought against Ripple Labs.
Fraud was the second most-cited reason for penalties with a total of $928m worth of penalties distributed to offending parties. The largest crypto violation on record was issued to Telegram, which launched an initial coin offering (ICO). The encrypted messaging platform is now facing a $1.2bn penalty.
The Commodity Futures Trading Commission (CFTC) issued Benjamin Reynolds, who ran a Ponzi scheme, with a $429m civil penalty and restitution to the tune of $143m.
The penalties remind stakeholders that regulators can still protect consumers and their interests.
In the report, Elliptic specifically noted that blockchain and crypto assets are far from being a “wild west of finance”.
The report did caution that people who fell on the sanctioned list were trying to come up with innovative ways to avoid the penalties and avoid detection.
Decentralized exchanges (DEX) have proven particularly appealing to nefarious players who enjoy the benefit of retaining much of their anonymity and offering a financial product to customers that doesn't require know-your-customer certification.