Recent actions by state and federal regulators may signal a coming crackdown on the crypto industry, The Wall Street Journal reported.

In the past week, New York State ordered Paxos Trust Co. to stop creating more of its Binance USD (BUSD) token, and the Securities and Exchange Commission (SEC) shut down crypto exchange Kraken’s staking service as part of a settlement that also required the exchange to pay $30 million.

Banking regulators are urging banks to end their relationships with crypto customers, which would limit their access to the real-world financial system, the Journal reported.

“It certainly feels, from an industry perspective, like there’s a crypto carpet bombing going on right now,” Kristin Smith, CEO of crypto industry group Blockchain Association, told the Journal, alluding to heightened attention from regulators after the collapse of crypto exchange FTX.

“There is a political incentive to bring bigger cases post-FTX to be viewed as the responsible cop on the beat,” attorney Coy Garrison told the Journal. Garrison is a former regulator and now a partner at Steptoe & Johnson LLP who advises clients on crypto legal issues.

Investors are already anticipating more actions as they divest from some of what they perceive to be regulatory targets. There were $2.7 billion worth of outflows from Binance in a 24-hour period from Sunday to Monday, according to blockchain data provider Nansen, and $144 million worth of BUSD were redeemed for dollars on Monday morning.

The SEC’s action against Kraken may indicate that it wants to stop companies from offering access to staking, which it defined in its Kraken settlement announcement as “a process in which investors lock up—or “stake”—their crypto tokens with a blockchain validator with the goal of being rewarded with new tokens when their staked crypto tokens become part of the process for validating data for the blockchain.”  

“This really should put everyone on notice in this marketplace,” SEC Chair Gary Gensler told  CNBC.

Earlier this year, the SEC charged crypto lender Genesis Global Capital LLC and its partner Gemini Trust Company LLC with violating securities laws by allowing users to earn interest on their crypto tokens.

The SEC’s recent formal actions against services such as staking and lending, which have been available for years, is stoking industry concerns that the commission wants to impose its full regulatory authority on the industry and not negotiate a separate regulatory regime.

“You are starting to see opportunistic and uneven actions that are designed to try to bring major industry players and platforms within the SEC’s jurisdiction,” Garrison said. “They have a tenuous connection to investor protection. These products have been offered for a long time.”

Gensler has rejected claims from industry members that the the crypto market is too distinctive to coexist with SEC rules, the Journal reported.