- SEC crypto firm fines have surged to a record $4.68 billion in 2024, setting a new benchmark
- Terraform Labs and its founder, Do Kwon, are among the notable targets for unregistered securities and misleading investors
- This increase in fines reflects a more aggressive regulatory approach by the SEC towards the crypto industry
Crypto is a gamble, both for investors and companies. The former dance with the volatility of the assets, while the latter can be destroyed in a single second by regulators.
The SEC Unleashes in 2024 with Historic Fines
Unstoppable for better or worse, the U.S. financial regulator, the SEC, has never been as aggressive as it is today with record fines imposed this year on Terraform Labs and its founder, Do Kwon.
Is the SEC waving the white flag in its battle against digital currencies? Not in the least. If anything, 2024 truly is a watershed year in the war waged by the SEC against the crypto industry. The commission has broken out the big guns with $4.68 billion in fines, or 63% of the total amassed since 2013.
What is the most salient case? Terraform Labs and its co-founder Do Kwon have been found guilty of offering unregistered securities and misleading investors.
A punitive measure exemplary of the fast-growing vigor in the approaches of the SEC.
- 3018% increase in fines between 2023 and 2024
- Average fine per case: $426 million
- Sanctions worth $7.42 billion since 2013
Compared to the benign 2023, which seemed almost like a break with only $150 million in fines.
It is part of the toughening up that the SEC wishes to inflict on the digital assets market. Gone are the days of small fines; in their place are mega-fines with the hope to make an impact and deter players from bending the law.
An Aggressive Crypto Strategy: Go After the Big Fish
The SEC has come a long way from its humble beginnings in 2013, when fines levied totaled a mere $40.7 million. A clear target now is to go after big names in the crypto industry.
In 2019, Telegram was fined $1.24 billion, and Ripple, an issuer of crypto XRP, was fined $125 million in 2021. These days, the agency doesn’t just go after companies but also executives, as was seen with Barksdale in 2022.
Conclusion
The increase in SEC fines is a dramatic hardening in its stance on cryptocurrencies. Regulation has turned aggressively towards big names, marking a new chapter in crypto market supervision.
