The United States Securities and Exchange Commission (SEC) has intensified its scrutiny of the cryptocurrency industry in recent years to boost transparency and ensure regulatory compliance.
According to a report from Social Capital Markets released on Sept. 11, the SEC has imposed fines totaling $7.42 billion on cryptocurrency firms and individuals since 2013, with a significant $4.68 billion imposed in 2024 alone.
A Rising Tide of Fines
In 2024, the SEC took significant steps to enforce regulations against cryptocurrency companies and their executives. The government agency imposed fines amounting to $4.68 billion, showcasing a remarkable 3,000% surge compared to the previous year.
This substantial increase can be primarily attributed to the monumental case where Terraform Labs and its founder, Do Kwon, were fined $4.67 billion for securities law violations related to the collapse of the TerraUSD (UST) stablecoin.
Despite the decrease in the number of enforcement actions from 30 in 2023 to 11 in 2024, the SEC's average fine for the year reached a record high of $426 million, indicating a shift towards fewer but more impactful penalties that set benchmarks for the entire industry.
crypto-industry-leaders">Billions in Fines for crypto Industry Leaders
Alongside the Terraform Labs case, the SEC has also levied substantial fines on other prominent cryptocurrency companies. In 2021, Ripple Labs faced a $125 million fine for allegedly selling XRP as an unregistered security, sparking debates within the crypto community about the regulatory classification of digital assets.
telegram Group Inc. encountered a $1.24 billion fine from the SEC in 2019 for an illicit offering of its telegram Open Network (ton) token. The SEC intervened to stop the project, citing violations of securities laws, emphasizing the importance of adhering to regulatory guidelines for fundraising via token sales.
The SEC's enforcement actions have not only targeted firms but also their top executives. Since 2020, the SEC has imposed fines totaling $5.08 billion under "Firm + Individual" penalties, underscoring its efforts to hold both corporate entities and key decision-makers accountable.
