In 2024, the U.S. Securities and Exchange Commission (SEC) experienced a landmark year, collecting a staggering $4.7 billion in enforcement actions against cryptocurrency firms and their executives. This amount represents an extraordinary 3,000% increase compared to the $150.3 million in fines imposed in 2023.
SEC’s Massive $4.7 Billion Settlement
A significant factor contributing to the SEC’s record-setting year is the $4.47 billion settlement with Terraform Labs and Do Kwon in June 2024. According to a September 9 report from Social Capital Markets, this settlement is the largest enforcement action the SEC has ever undertaken. This single settlement accounted for the majority of the fines imposed by the SEC in 2024, marking a strategic shift towards high-impact cases.
Despite executing 19 fewer enforcement actions than in 2023, the SEC’s penalties have skyrocketed. The regulator’s 11 actions in 2024 reflect a more targeted approach, focusing on larger settlements and fines that send a clear message to cryptocurrency firms: non-compliance will not be tolerated.
Previous High-Profile Cases
The SEC has a history of targeting major players in the crypto industry. In 2019, the agency imposed a $1.24 billion fine on Telegram, including $18.5 million in civil penalties and $1.2 billion in disgorgement returned to investors. This case marked a significant increase in the average fine, which rose by nearly 2,000% year-over-year.
In recent years, the SEC has also targeted other prominent names like Ripple Labs, GTV Media Group, and fraudsters John and Tina Barksdale, all of whom faced enforcement actions exceeding $100 million.
Smaller Fines Still Common
While the SEC has shifted its focus to larger cases, smaller fines remain a common occurrence. Since 2020, 46% of the penalties imposed have been below $1 million, and 30% have ranged between $1 million and $10 million. Despite this, the average fine has surged to over $420 million in 2024 due to high-profile cases like Terraform Labs.
As the SEC continues its crackdown on the cryptocurrency industry, the rise in enforcement actions shows no sign of abating. The regulator is expected to remain a key player in shaping the future of cryptocurrency regulation, ensuring compliance and protecting investors from fraudulent activities.
