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.
Record Breaking Fines in 2024
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.
History of Fines 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.
Accountability for Companies and Executives
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.
These events underscore the SEC's efforts to enforce compliance in the cryptocurrency industry, aiming to prevent violations and increase transparency in the sector.
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