SEC fines hit record $8.2 Billion in 2024, Terraform case accounts for 56%
SEC fines hit record
Amid criticism of the U.S. Securities and Exchange Commission's (SEC) aggressive stance towards the crypto industry, the agency has reported enforcement penalties for 2024.
In the current fiscal year, the SEC set a record by imposing $8.2 billion in fines, despite initiating 26% fewer enforcement cases (583) compared to the previous year.
The $4.5 billion judgment against Terraform Labs accounted for 56% of the total penalties issued by the SEC.
The collapse of the Terra/Luna ecosystem in 2022 destabilized the cryptocurrency market, causing massive investor losses. The SEC found Terraform Labs and its CEO, Do Kwon, guilty of defrauding investors, resulting in the largest monetary penalty in SEC history. The agency described the case as one of the most significant securities fraud cases ever handled.
Other notable cases included a settlement with Silvergate Capital Bank, linked to crypto firms like FTX, over failure to comply with disclosure requirements.
Additionally, BarnBridge DAO was accused of failing to register its crypto assets as securities.
SEC highlights investor protection efforts
In fiscal year 2024, $345 million was distributed to harmed investors, bringing the total to $2.7 billion since 2021.
The SEC also processed over 45,000 tips, complaints, and referrals, including 24,000 whistleblower submissions. Whistleblower awards reached $255 million, which the SEC highlighted as evidence of the importance of public cooperation in uncovering misconduct.
Criticism of SEC StrategyDespite these record fines, critics have questioned the effectiveness of the SEC’s enforcement strategy, particularly its approach to the crypto industry.
While hefty fines serve as a deterrent, they fail to address deeper systemic issues within financial markets.
U.S. Securities and Exchange Commission Chair Gary Gensler, known for his hardline approach to cryptocurrency regulation, has announced his resignation effective Jan. 20, 2025, the day President-elect Donald Trump is sworn in. Gensler will not only step down as chairman but will also vacate his position as a commissioner, foregoing the opportunity to defend his policies until his term’s original end in 2026.
