TLDR:
- SEC fines against crypto firms reached $4.7 billion in 2024
- This is a 3,000% increase from 2023
- Terraform Labs settlement of $4.47 billion was the largest fine
- SEC is focusing on fewer but larger enforcement actions
- Total fines in 2024 exceed all fines from 2013-2023 combined
The U.S. Securities and Exchange Commission (SEC) has dramatically increased its fines against cryptocurrency companies in 2024.
According to a new report, the SEC has imposed nearly $4.7 billion in fines so far this year. This is a huge jump – over 3,000% higher than the $150 million in fines given out in 2023.
The main reason for this big increase was a single case. In June 2024, the SEC reached a $4.47 billion settlement with Terraform Labs and its former CEO, Do Kwon. This was the largest fine the SEC has ever given to a crypto company.
Even though the SEC has taken fewer enforcement actions in 2024 compared to last year, the total amount of fines is much higher. The SEC has only had 11 enforcement cases so far in 2024, compared to 30 cases in 2023. But those 11 cases resulted in much bigger fines overall.
In fact, the fines given out just in 2024 are more than all the fines the SEC imposed on crypto companies from 2013 to 2023 combined. This shows how the SEC is changing its approach. Instead of many smaller fines, it’s now focusing on fewer cases with very large penalties.
The report suggests this change is meant to “set precedents for the entire industry.” By giving out massive fines in a few high-profile cases, the SEC may be trying to send a strong message to all crypto companies about following regulations.
Before 2024, some of the largest fines included:
- $1.24 billion against Telegram in 2019
- $539 million against GTV Media Group in 2021
- $125 million against Ripple Labs in 2021
The average fine amount has gone up and down over the years. In 2019, it jumped to over $70 million because of the big Telegram case. For the next few years, the average was between $5 million and $35 million. But now in 2024, the average fine is over $420 million, mainly because of the huge Terraform Labs penalty.
Year-by-Year Breakdown of SEC Fines (2013-2024)
| Year | Total Fines (in USD) | Number of Enforcement Actions |
|---|---|---|
| 2013 | $40,704,667 | 1 |
| 2014 | $119,231 | 2 |
| 2015 | $9,020,000 | 2 |
| 2016 | $53,756 | 1 |
| 2017 | $6,911,613 | 4 |
| 2018 | $47,592,432 | 14 |
| 2019 | $1,342,850,848 | 19 |
| 2020 | $119,169,948 | 23 |
| 2021 | $703,988,616 | 20 |
| 2022 | $308,907,478 | 21 |
| 2023 | $150,267,858 | 30 |
| 2024 | $4,686,644,126 | 11 |
| Total | $7,416,230,573 | 148 |
Since 2020, almost half of the fines (46%) have been less than $1 million. Another 30% were between $1 million and $10 million. So while there are some very big fines making headlines, the SEC is still giving out many smaller penalties too.
The types of violations the SEC is penalizing include:
- Selling unregistered securities
- Misleading investors
- Fraud
- Not following proper regulations for crypto exchanges
Source: https://blockonomi.com/sec-fines-against-crypto-companies-skyrockets-to-4-7-billion-in-2024/