SEC Crypto Enforcement Shares Up 3,000% to $4.7 Billion by 2024: Report

The US Securities and Exchange Commission (SEC) has stepped up its enforcement actions against the cryptocurrency sector in 2024, imposing nearly $4.7 billion in fines.

This figure represents a 3,018% increase from the $150.3 million in fines issued in 2023.

Record clearance

According to a report by Social Capital Markets, the 2024 numbers are largely attributed to the SEC’s $4.47 billion settlement with Terraform Labs and its former CEO Do Kwon in June, making the agency’s largest enforcement action to date.

This legal action addressed serious issues, including misleading investors and offering unregistered securities, following the collapse of TerraUSD (UST) and its associated ecosystem.

Total fines for 2024, amounting to $4.68 billion, include various penalties including forfeiture, dumping, civil penalties, liquidation and prejudgment interest.

Although the regulator’s crackdown dropped from 30 in 2023 to 11 in 2024, average fines soared to about $426 million, up from $14.71 million in 2022.

“This trend indicates a strategic shift by the SEC toward fewer but larger fines, with a focus on taking high-impact enforcement actions that set industry precedents,” the report notes.

Other notable fines in 2024 include penalties against companies such as GTV Media Group and fraudsters John and Tina Barksdale, each of more than $100 million.

Crypto fines totaled $7.42 billion since 2013

Since 2013, the SEC has issued over $7.42 billion in fines against the cryptocurrency industry. Of this total, 63% was only in 2024.

In 2019, the $1.24 billion fine imposed on Telegram Group Inc. and TON Issuer Inc. for unregistered token sales resulted in a remarkable 2,000% increase in the average fine compared to previous years.

Ripple Labs was fined $125 million for selling XRP as an unregistered security, bringing the average fine that year to $35.2 million. However, the SEC still disagrees, as it may dispute it.

The 2024 enforcement actions also emphasize accountability for both companies and their executives, with “company + individual” penalties totaling $5.08 billion across 63 actions.

The majority of fines exceeded $1 billion, accounting for 46% of the total, largely due to the $4.68 billion penalty against Terraform Labs. Penalties ranging from $1 million to $10 million, which account for 30 percent, are also common and often involve smaller companies. There were also trials under $1 million, highlighting the ongoing scrutiny of smaller projects.

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