SEC Enforcement Actions Record with Over 50% of Crypto Fines

Key Points:

• The SEC set a record with $8.2 billion in fines and investor relief in fiscal 2024.
• Despite a 26% drop in SEC enforcement actions compared to 2023, the agency still showed effectiveness in remediating financial fraud.

The U.S. Securities and Exchange Commission (SEC) set a new record for fines and investor relief in fiscal 2024, marking a significant year for enforcement actions, including those within the cryptocurrency sector.

Read more: SEC Chair Gary Gensler Will Lose Power From January 20 

SEC Enforcement Actions Hit Record, $8.2 Billion in Fines

The commission brought 583 enforcement actions, 26% fewer than filed in the last fiscal year. Still, the SEC enforcement actions led to more than $8.2 billion in penalties and reimbursement to investors, the second-largest total in the agency’s history.

Of that total, roughly 56% was connected to a monumental judgment from a jury trial win against Terraform Labs and its founder, Do Kwon. The SEC accused them of one of the largest securities frauds in U.S. history. In June, Terraform agreed to pay $4.47 billion to settle the lawsuit.

In all, apart from the Terraform case, SEC enforcement actions resulted in $2.1 billion in civil fines and $6.1 billion in disgorgement, the process of returning ill-gotten gains to affected investors.

More than $600 Million in Penalties for Firms Using Off-Channel Messaging

The SEC also took serious action against financial firms for their improper use of off-channel communication platforms such as WhatsApp. More than 70 firms have assessed a total of $600 million in civil penalties for failing to comply with the rules of official communication.

In addition, the SEC barred 124 individuals from serving as officers or directors of public companies- the second-highest number in the last ten years.