- SEC fines reach $4.68B in 2024.
- Terraform Labs was fined $4.68B for securities violations.
- SEC focuses on major players.
Despite the crypto industry’s outcries, the U.S. Securities and Exchange Commission (SEC) is stepping up its enforcement efforts.
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2024 marks a turning point, as the SEC imposed an unprecedented $4.68 billion in fines against crypto companies. This is more than the total amount of fines since 2013.
SEC’s Record-Setting Fine in 2024
The SEC fines against crypto firms exploded in 2024. According to a report by Social Capital Markets, 2024 saw 11 enforcement actions against crypto companies, amounting to $4.68 billion in fines. However, this figure primarily comes from the $4.68 billion fine against Terraform Labs, and its founder, Do Kwon .
Source: Social Capital Markets
This fine dwarfs the previous largest penalty of $1.24 billion, which the SEC imposed on Telegram Group in 2019. Telegram came under scrutiny due to the launch of the TON coin, which has since nominally separated from Telegram.
While the huge fine against Terraform Labs made 2024 a historic year, the trend has been in the making, and between 2019 and 2024, the SEC pursued legal action against some of the largest names in crypto. This includes Ripple, Telegram, and Terraform Labs.
SEC Faces Pushback For Crypto Enforcement
Under Chair Gary Gensler , the SEC argues that most cryptocurrencies fall under securities regulations. This means crypto assets should follow the same rules as publicly traded stocks. This rule exposes virtually all crypto assets to regulatory risk.
Despite this, the SEC’s actions were not without pushback. Numerous legislators have opposed the SEC’s sweeping enforcement and proposed plans for a new regulatory framework for crypto. Legislators are looking to balance innovation with investor protection, arguing that the SEC has not done so.
On the Flipside
- Terraform Labs and its founder, Do Kwon, face accusations of significant wrongdoing. The company cost its users billions of dollars and misrepresented its business to users and investors.
- SEC is under criticism from crypto firms, which are threatening to leave the US if the regulatory framework does not change.
Why This Matters
The most significant consequence of the SEC’s escalating fines is their chilling effect on both established firms and new startups.
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