The U.S. Securities and Exchange Commission (SEC) has reached a historic high in cryptocurrency penalties in 2024, imposing fines totaling $4.68 billion, according to reports from Social Capital. This marks a significant increase in regulatory actions as the SEC continues to clamp down on the crypto industry.
Since the SEC began its oversight of the cryptocurrency market in 2013, it has amassed over $7.42 billion in fines. The penalties imposed so far this year account for 68% of that total, highlighting a more aggressive approach in the enforcement of crypto regulations.
The single largest penalty in 2024 came from a $4.68 billion settlement with Terraform Labs, the company behind the Terra cryptocurrency, which has set a new record for the industry. This surpasses the $4.3 billion settlement from 2023 between the U.S. Department of Justice and Binance, one of the world’s largest crypto exchanges.
SEC’s Growing Enforcement Actions
This year, the SEC has already initiated 11 lawsuits targeting cryptocurrency companies. Although fewer in number compared to 2023, when the commission filed 30 lawsuits resulting in $150 million in settlements, the size of penalties has surged significantly.
The SEC’s trend toward stricter regulation began in 2018, when it started levying larger fines on digital asset firms. By 2019, the average penalty size had jumped considerably, driven in part by a $1.2 billion fine against Telegram’s cryptocurrency project, TON. Under the leadership of SEC Chair Gary Gensler, this stringent enforcement has continued unabated.
Gensler has emphasized that a substantial number of digital assets should be classified as securities and subjected to federal securities laws. His stance has sparked ongoing legal battles with major crypto companies like Coinbase and Ripple. Critics within the crypto space have described the SEC’s actions as part of an unofficial campaign, often referred to as “Operation Choke Point 2.0,” aimed at curbing the industry’s growth through heightened scrutiny and regulation.
As the SEC presses forward with its regulatory agenda, 2024 appears set to be a defining year for the relationship between the cryptocurrency sector and U.S. financial regulators.
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