In 2024, the U.S. Securities and Exchange Commission (SEC) levied nearly $4.7 billion in enforcement actions against cryptocurrency firms and executives, marking an extraordinary 3,000% increase compared to the previous year, the Social Capital Markets reported. Â
This unprecedented spike was driven by the SEC’s $4.47 billion settlement with Terraform Labs and its former CEO, Do Kwon, in June — the regulator’s largest enforcement action to date, according to a report from Social Capital Markets on Sept. 9.
All $4.7 Billion from only 11 Enforcement Actions in 2024
Even though the SEC took fewer enforcement proceedings in 2024, which is 11, compared to 30 in 2023, its strategy has changed.
In 2023, the regulator collected $150.3 million in fines, however, in 2024, the emphasis was placed on imposing fewer but much bigger penalties.
According to Social Capital Markets, this change reflects a strategic focus on enforcement actions with a high impact that aims to establish industry standards.
Since the SEC started levying higher fines on digital asset firms in 2018, the agency’s regulatory clampdown on the cryptocurrency industry has become increasingly prevalent. The year 2019 saw a notable acceleration of this trend with the $1.2 billion fine against Telegram’s cryptocurrency initiative.
The SEC has maintained its strong posture under the direction of Chair Gary Gensler, who has stated that many digital assets are securities and need to be regulated by the federal government.
Significant fines were imposed on several well-known companies and individuals in 2024. In addition to Terraform Labs, businesses including GTV Media Group, Ripple Labs, and scammers John and Tina Barksdale were subject to fines of over $100 million.
The SEC’s focus on fewer, more significant proceedings that may result in tighter rules for the whole cryptocurrency industry is reflected in these instances.
SEC and Legacy of Penalties
The SEC takes action against lesser offences as well. Of all the fines that have been imposed since 2020, 46% have been under $1 million, while 30% have been between $1 million and $10 million. This harmony between well-publicized cases and lesser fines shows that the SEC is still keeping a close eye on and dealing with wrongdoing at all levels of the bitcoin industry.
In response to the cryptocurrency industry’s explosive growth and growing public scrutiny, the SEC has signalled its determination to hold companies responsible and enforce additional regulations through this strategic shift and historic instances like the Terraform Labs settlement.