In 2024, the SEC collected a record $8.2 billion in penalties and returned $345 million to victims. A large part of the funds came from major cases like Terraform Labs. While the number of cases went down, the financial watchdog continued to focus on punishing wrongdoers and protecting investors, especially in areas like cryptocurrency, AI, and cybersecurity.
This year, the U.S. Securities and Exchange Commission (SEC) levied $8.2 billion in financial remedies, the largest in its history. Although the number of enforcement cases decreased by 26%, the funds raised came from large penalties levied in cases like Terraform Labs.
Record financial penalties in 2024
Much of the SEC’s $8.2 billion came from the Terraform Labs case, involving the defunct company and its CEO, Do Kwon. It won a $4.5 billion judgment against Terraform Labs, which made up 56% of the regulator’s 2024 report.
The case started after the 2022 Terra/Luna cryptocurrency collapse, which caused massive losses for investors. Terraform Labs and Do Kwon were found to have misled and defrauded investors. The $4.5 billion penalty is now the largest monetary fine ever levied by the SEC and is one of the biggest securities fraud cases in U.S. history.
The SEC also took action against Silvergate Capital regarding its compliance programs, particularly its relationship with FTX. It also charged BarnBridge DAO with violating federal regulations.
The regulator returned $345 million to people affected by these cases, bringing the total amount returned to over $2.7 billion since 2021.
Also, the SEC received over 45,000 tips in 2024, including 24,000 from whistleblowers, and awarded $255 million to them. The agency filed 583 cases, a decrease of 26% compared to the previous year.
- Stand-alone actions (individual cases brought against companies or people) decreased by 14%.
- Follow-on proceedings (cases that followed criminal convictions or civil injunctions) saw a drop of 43%.
- Actions against issuers (companies failing to file required documents) fell by 51%.
SEC Chair Gary Gensler defended that the agency’s efforts help protect investors and promote integrity in financial markets. He stated that it will continue to follow the facts and the law wherever they lead, holding wrongdoers accountable.
Many were not fond of Gary Gensler’s approach and wanted him replaced. Trump’s administration has already paved the way for what many expect to be a new crypto-friendly Chair.
However, some are still convinced that the SEC’s approach is not enough. Critics like Miles Jennings from a16z believe that while large fines can serve as deterrents, they do not address the systemic problems in the financial markets. Jennings pointed out that penalties do not necessarily prevent future recurrences or solve the issues within the industry.
Action against technology
The SEC released its fiscal year 2024 results to highlight its efforts to protect investors and hold financial wrongdoers accountable, particularly in the cryptocurrency and technology industries. The agency leaned on public tips in a year that it handed out large financial penalties.
Meanwhile, some critics maintain that the agency’s approach does not solve deeper systemic issues.
In addition to the crypto cases, the SEC also focused on emerging technologies such as artificial intelligence (AI), social media, and cybersecurity. In some cases, companies misled investors about using AI or failed to report cyber incidents promptly.
For example, QZ Asset Management was charged for falsely claiming it would use AI technology to generate strong returns, and the New York Stock Exchange was penalized for not reporting a cyberattack.
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