The U.S. Securities and Exchange Commission (SEC) has ramped up its enforcement actions against the cryptocurrency sector in 2024, imposing nearly $4.7 billion in fines.
This figure represents a 3,018% increase from the $150.3 million in fines issued in 2023.
Record Breaking Settlement
According to a report from Social Capital Markets, 2024’s figures are largely attributed to the SEC’s $4.47 billion settlement with Terraform Labs and its former CEO, Do Kwon, in June making it the largest enforcement action to date by the agency.
This legal action addressed serious issues, including misleading investors and offering unregistered securities, following the collapse of TerraUSD (UST) and its associated ecosystem.
The total fines for 2024, which stand at $4.68 billion, include various penalties such as forfeiture, disgorgement, civil penalties, settlement, and prejudgment interest.
Although the regulator’s crackdown dropped from 30 in 2023 to 11 in 2024, average fines soared to about $426 million, up from $14.71 million in 2022.
“This trend indicates a strategic shift by the SEC toward fewer but larger fines, with a focus on making high-impact enforcement actions that set precedents for the entire industry,” the report notes.
Other notable fines in 2024 include penalties against firms like GTV Media Group and fraudsters John and Tina Barksdale, each exceeding $100 million.
Crypto Fines Amounted to $7.42 Billion Since 2013
Since 2013, the SEC has issued over $7.42 billion in fines against the cryptocurrency industry. Of this total, 63% has been in 2024 alone.
In 2019, the $1.24 billion fine imposed on Telegram Group Inc. and TON Issuer Inc. for unregistered token sales led to a notable 2,000% increase in the average fine compared to previous years.
Ripple Labs received a $125 million fine for selling XRP as an unregistered security, causing the average fine for that year to rise to $35.2 million. However, the SEC is yet to agree as it can dispute this one.
The enforcement actions in 2024 also emphasize accountability for both companies and their executives, with “firm + Individual” penalties totaling $5.08 billion across 63 actions.
Most fines exceeded $1 billion, making up 46% of the total, largely due to the $4.68 billion penalty against Terraform Labs. Punishments ranging between $1 million and $10 million are also common, accounting for 30%, and often involve smaller firms. There were also judgments falling under $1 million, highlighting ongoing scrutiny of minor projects.
