In 2024, the United States Securities and Exchange Commission (SEC) dramatically increased its enforcement actions against cryptocurrency firms and executives, totaling nearly $4.7 billion. This amount is 3,000% more than the fines of $150.3 million set in 2023.
The SEC’s penalties more than doubled as the result of its record $4.47 billion settlement with Terraform Labs and its ex-chief, Do Kwon, in June. This settlement is the most significant enforcement action ever by the SEC.
Terraform Labs Pushes Average SEC Fine Above $420M
Though the SEC undertook 11 actions this year compared to 30 last year, the fines greatly increased. The rise in fines includes various penalties, including forfeiture, disgorgement, civil penalties, and settlement amounts. This shift in approach implies that the SEC’s focus is shifting from a high number of cases to a high-impact case that will create standards within the industry.
On the other hand, in 2019, the SEC levied a penalty of $1.24 billion on the social messaging network Telegram comprised of $18.5 million in Civil penalties and $1.2 billion in disgorgement. This case influenced the average fines because the fines increased by almost 2,000% that year. The average fine was between $5 million and $35.2 million over the subsequent four years. However, due to the Terraform Labs case, the average fine in the year 2024 has gone above $ 420 million.
Among this year’s penalties, GTV Media Group, Ripple Labs, and the con artists John and Tina Barksdale all have penalties beyond $100 million. However, around 45% of the penalties since 2020 have been $1 million or less, and 30% have been between $1 million and $10 million. The SEC’s actions in the recent past show a crucial shift in its strategic plan in the cryptocurrency market by going after big-name cases.
