SEC Shatters Records with $4.68B in Cryptocurrency Fines for 2024
Setting a record, in 2024, the US Securities and Exchange Commission has collected an astonishing $4.7 billion in fines against cryptocurrency companies. This is a drastic upsurge in enforcement actions as the SEC continues to show regulatory teeth in the crypto industry. Beginning in 2013 when the SEC first started playing an active role in regulating digital assets, it has collected more than $7.42 billion in fines-68% from this year’s fines imposed.
This year, the largest settlement came from a deal with Terraform Labs, the company behind the Terra cryptocurrency. The $4.68 billion settlement with Terraform Labs eclipses all the previous penalties that were ever levied, even greater than the $4.3 billion agreement reached in 2023 between the US Department of Justice and Binance-one of the world’s largest cryptocurrency exchanges. This landmark settlement shows the turning point of the SEC to crack down on digital asset companies.
So far this year, the SEC has filed 11 lawsuits against cryptocurrency companies in 2024; that compares with 30 in all of 2023. But the value of the penalties has skyrocketed. The SEC has taken such an aggressive enforcement posture under its current chair, Gary Gensler, who has made clear that many digital assets ought to be considered securities and subject to federal regulations. Under Gensler’s leadership, the SEC has ramped up its pressure on the crypto industry, making it clear that it now intends to regulate the sector more aggressively.
The increased focus by the SEC on digital assets began to ramp up in 2018 when it began touting larger fines against crypto firms. By 2019, the average fine was sharp, to a $1.2 billion settlement against Telegram’s cryptocurrency project, TON. That trend has continued under Gensler, who spearheaded what some in the crypto industry term “Operation Choke Point 2.0″a concerted push by regulators to rein in non-compliant crypto companies.
The effort by the SEC has also translated into court fights with major cryptocurrency platforms such as Coinbase and Ripple, while the regulator has continued to claim that a large portion of digital assets are securities. As the crypto industry becomes more mature, increased enforcement by the SEC and higher fines set the course for a more regulated and controlled future for digital assets with full compliance with federal securities laws.
