Decoding SEC Actions: Enforcement Trends through Analyzing Blockchain Litigation using LLM-based Thematic Factor Mapping

Blockchain’s potential for both financial and societal benefits is affected by regulatory ambiguities and enforcement actions against blockchain entities. Evolving regulatory frameworks emphasize the need for insights to protect users, small investors, and ensure equitable participation. Currently, the lack of systematic analysis creates barriers to understanding trends and making informed decisions about participation. This study proposes methods to analyze litigation drivers by the U.S. Securities and Exchange Commission (SEC), to facilitate regular users’ understanding of regulatory trends to make informed decisions about blockchain participation. Utilizing pretrained language models and large language models, we systematically map all SEC complaints against blockchain companies from 2012 to 2024 to thematic factors conceptualized to delineate the factors that drive SEC actions. We quantify the thematic factors and assess their influence on the legal Acts cited within the complaints on an annual basis, allowing us to discern the regulatory emphasis, patterns and conduct trend analysis.

Citation

J. Luo, X. Xiong, W. Knottenbelt, X. Liu, "Decoding SEC Actions: Enforcement Trends through Analyzing Blockchain Litigation using LLM-based Thematic Factor Mapping," 2025, pp. 209-218.

Source

ICAIL '25: Proceedings of the Twentieth International Conference on Artificial Intelligence and Law

Conference

Proceedings of the Twentieth International Conference on Artificial Intelligence and Law

Keywords

48 Law and Legal Studies, 4801 Commercial Law

Source

Proceedings of the Twentieth International Conference on Artificial Intelligence and Law

Publisher

Association for Computing Machinery (ACM)

DOI

10.1145/3769126.3769235

Additional links

https://dl.acm.org/doi/10.1145/3769126.3769235