In 2024, the US Securities and Exchange Commission (SEC) has imposed $4.68 billion in fines on the crypto sector, representing a 3,018% rise from the prior year.
This signifies a transition towards impactful enforcement measures in the cryptocurrency sector, focusing on cases that establish important precedents for the industry.
The SEC asserts that these penalties are integral to its comprehensive initiatives to enforce compliance, safeguard investors, and promote transparency in the crypto market. Although enforcement actions have decreased, the revenue generated from fines has surged, highlighting a transition towards fewer yet more substantial cases.
The majority of the fines levied by the SEC in 2024 originated from a significant case against Terraform Labs, instituted following the failure of its algorithmic stablecoin, TerraUSD.
Furthermore, the corporation faced allegations of deceiving investors over the security and stability of its digital assets. In June 2024, Terraform Labs reached a settlement with the SEC, significantly augmenting the total penalty accrued for the year.
The SEC’s 2024 enforcement approach indicates a transition to a reduced number of proceedings accompanied by substantially bigger penalties, highlighting the significance of prominent cases that may establish precedents for the whole bitcoin sector.
Additionally, the average penalty in 2024 was around $426 million, a significant increase from an average of $3.39 million in 2018. The SEC’s assertive strategies have elicited criticism from the crypto industry, with some characterizing its stance as excessively severe.
