SEC Crypto Enforcement Rises by 3,000% Hitting $4.7 Billion, a Number Boosted by its Settlement with Terraform Labs

• The SEC’s crypto enforcement rose by 3,000% hitting $4.7 billion.
• A great share came for the SEC’s settlement with Terraform Labs and Do Kwon.
• The SEC’s strategic shift of fewer but larger fines seems to be working for the entity.

The SEC has imposed almost $4.7 billion worth of enforcement actions against crypto companies and executives in 2024 so far. This means the SEC’s crypto enforcement has gone up by 3,000% in comparison to 2023.

To highlight, this number sets a record as a yearly high for the SEC. A large number of these funds has come from the entity’s massive settlement with Terraform Labs and its former CEO Do Kwon in June. This marks the SEC’s largest enforcement so far according to a Social Capital Markets report. 

The SEC Effectively Breaks Records

In detail, the SEC undertook 11 enforcement actions in 2024 which have all together seen a net 3,018% increase from its $150.3 million worth of fines in the past year, despite it having 19 fewer actions laid against crypto firms. More so, the total monetary enforcement amount won by the SEC in 2024 so far overtakes the combined total amount between 2013 and 2023. 

Adding on, the SEC has collected a total amount of fines including disgorgement, settle amounts, civil penalties, forfeiture amount, and prejudgment interest which were counted since the time the SEC initiated the enforcement action.

SEC’s Strategic Shift Proves Successful

Based on the spike in this year’s hike, it looks like the SEC has made a strategic shift towards targeting more influential cases. In fact, the report itself suggests the shift in trend by the SEC toward fewer but larger fines. This strategy puts a focus on making high-impact enforcement actions that set precedents for the entire crypto industry.

Other significant fines from the SEC include the $1.24 billion action against Telegram in 2019. This fine comprised $18.5 million in civil penalties and $1.2 billion in disgorgement paid back to investors. The data reveals how this case significantly contributed to the average fine rising nearly 2,000% year-on-year to over $70 million in 2019.

As for the next four years, the SEC saw the average fine drift between $5 million and $35.2 million until the Terraform Labs case brought 2024’s average fine above $420 million. Ultimately, it looks like the SEC has had an effective year with its shift in strategy.

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