US Regulators Received Over $32b From Crypto Companies

US regulators fined crypto companies $32 billion to resolve compliance disputes. Who did they make the most money from?

The record $19.45 billion of the total came in 2024. This stems from a $12.7 billion payment to FTX and Alameda Research. In August, Judge Peter Castel ruled that the companies must pay $8.7 billion in damages, jointly and severally, to those who suffered losses. The agreement also stipulates that a fee of $4 billion will be paid for ill-gotten gains.

The deal with Terraform Labs netted regulators $4.5 billion in 2024. The company will pay approximately $3.59 billion in interest and $420 million in fines. Its founder, Do Kwon, will pay $204.3 million in interest, fines and damages, and will accrue at least the same amount to his “bankruptcy estate” that will be distributed among investors.

Among the most significant fines, $4.3 billion was given to Binance and $4.7 billion to Celsius in 2023. As part of the lawsuit, the largest crypto exchange was ordered to pay a $1.81 billion fine in the criminal case and will forfeit $2.51 billion in damages.

“The leading global crypto exchange agreed to plead guilty in November 2023 to resolve lawsuits with multiple US regulators, including the Department of Justice (DOJ), Treasury Department, and Commodity Futures Trading Commission (CFTC).”

CoinGecko report

As for the Celsius penalty, in 2023 the US Federal Trade Commission announced that a settlement had been reached against the Celsius Network. As part of the settlement, Celsius and its subsidiaries were prohibited from offering, selling or promoting any product or service that “could be used to deposit, exchange, invest or withdraw any asset.”

Source: CoinGecko

Terra became the catalyst for the bear market, followed by the bankruptcy of Celsius, resulting in the collapse of FTX in November 2022. Of these crypto platforms, only Binance remains the largest centralized exchange in terms of trading volume.

However, the sharp increase in recovery amounts occurred in 2023, when the total amount of settlements for claims by US government agencies reached $10.87 billion in eight cases.

When did major crypto enforcement actions in the US occur?

The last two years have seen numerous crypto enforcement actions in the US. 16 of the 25 major actions were carried out during this period; This reflects increased regulatory scrutiny following the collapse of FTX in late 2022. In 2023, law enforcement settled eight cases for $10.87. billion, reached a record number and increased by 8,327.1% compared to the previous year.

Eight more agreements worth $19.45 billion were reached in 2024. With only a few months left until the 2024 consensus value, there was an increase of 78.9% compared to the previous year.

“Given that US regulators have shown no signs of slowing down their scrutiny of the crypto industry, more lawsuit settlements could be on track to be recorded in 2024 than last year.”

CoinGecko report

From 2019 to 2022, American regulators also made progress on major cryptocurrency cases. The first significant deal came with Block.one in late 2019, when the SEC reached a $24 million settlement over unregistered securities sales. In 2020, the SEC successfully settled two large cases: BitClave for $29.34 million and Telegram for $1.24 billion in May.

Three notable cases have occurred in 2021 amid rising crypto prices. Tether reached a settlement with the CFTC, agreeing to pay $18.5 million and then $41 million. Poloniex and BitMEX also reached settlements of $10.39 million and $100 million, respectively, in their cases. In 2022, BlockFi reached a $100 million settlement with the SEC and Bittrex reached a $29 million settlement with the Treasury Department.

Actual cuts could be even higher

At the same time, CoinGecko experts did not take into account the fines and other payments that the CFTC imposed on individual top executives.

Notably, recently, the founder of Binance agreed to pay a $50 million fine and voluntarily came to the United States from the United Arab Emirates for a hearing.

Another case is about accusations against the BitMEX crypto exchange in 2020. US regulators subsequently filed charges against BitMEX and three of its founders, including the exchange’s chairman, Arthur Hayes. Hayes left the company, pleaded guilty, paid a $10 million fine and was sentenced to two years probation.

The total fine imposed on just two individuals was $60 million. But regulators have other personal fines in the past, so regulators’ actual revenues may be more than several billion dollars.