SEC Sets Record With $8.2 Billion In Penalties Amid Crypto Crackdown

According to Cointelegraph, the United States Securities and Exchange Commission (SEC) achieved a historic milestone in penalties and fines during the fiscal year 2024, largely due to a significant settlement with the cryptocurrency firm Terraform Labs. The SEC reported $8.2 billion in financial remedies for the year ending September 30, marking the highest amount in its history, despite a 26% decline in the number of cases to 583 compared to the previous year. A substantial portion of this total stemmed from the SEC's legal victory against Terraform Labs and its former CEO, Do Kwon. The company agreed to a $4.47 billion settlement after being found liable for fraud related to the collapse of its blockchain ecosystem in 2022, which resulted in billions of dollars in losses. Without the Terraform settlement, the SEC's collections would have amounted to $3.72 billion, which would have been its lowest since 2013, when it collected $3.4 billion in fines and penalties. Overall, the SEC's total fines and penalties for 2024 increased by 65.5% from the previous year. The agency collected $2.1 billion in penalties and a record $6.1 billion in disgorgement, which involves returning illicit profits to affected investors. Outgoing SEC Chair Gary Gensler emphasized the agency's commitment to accountability, stating, "The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable." This record-setting year concludes Gensler's nearly four-year tenure, as he is set to resign on January 20, 2025, coinciding with President-elect Donald Trump's inauguration. Under Gensler's leadership, the SEC has maintained a stringent stance against cryptocurrency companies, with crypto-related enforcement actions peaking at 46 last year. Although the number of crypto cases dropped to 11 in 2024, fines related to these actions surged by over 3,000% due to the Terraform settlement. The U.S. cryptocurrency industry is hopeful that the SEC's rigorous enforcement will ease, as Trump has pledged to reduce regulatory pressures on the sector. Pantera's chief legal officer, Katrina Paglia, expressed optimism last week, suggesting that the SEC's numerous crypto lawsuits might "quietly go away" as Trump begins his second and final term.