SEC strengthens cryptocurrency regulation, setting record fines
The U.S. Securities and Exchange Commission (SEC) has hit a record high in cryptocurrency fines this year, demonstrating its determination and strength in regulating digital assets. According to statistics from Social Capital, the SEC has accumulated more than $7.42 billion in fines since it began regulating the cryptocurrency industry in 2013. In 2024 alone, the SEC’s total fines against cryptocurrency-related companies have reached $4.68 billion, accounting for 68% of the total amount.
This figure is largely due to the SEC’s $4.68 billion settlement this year with Terraform Labs. The fine for Terraform Labs, the company behind the Terra cryptocurrency, even exceeds the $4.3 billion settlement reached by the U.S. Department of Justice in 2023 with cryptocurrency exchange Binance. This also makes Terraform Labs’ fine one of the largest in the cryptocurrency industry to date.
Source: Social Capital’s annual overview of SEC fines from 2013 to 2024
Fines are rising year by year, and the SEC is stepping up its crackdowns.
The SEC’s fines and lawsuits against cryptocurrency companies began to increase significantly as early as 2018, when the SEC began to implement more stringent fines against digital asset companies. Since then, the amount of penalties faced by cryptocurrency companies has increased significantly, especially in 2019, when Telegram’s cryptocurrency project (TON) was fined $1.2 billion, becoming the largest fine at the time.
According to the data, the SEC has filed 11 lawsuits against cryptocurrency companies so far in 2024, while in 2023, the SEC filed 30 lawsuits and successfully obtained a settlement of $150 million. As these lawsuits mount, so does regulatory pressure on cryptocurrency businesses.
SEC Chairman Gary Gensler has long believed that many digital assets should be considered securities and subject to federal law. After taking office, he continued to promote strong regulatory actions against the cryptocurrency industry. This series of measures was even called "Operation Choke Point 2.0" by the cryptocurrency community. The SEC’s recent regulatory actions have also resulted in legal disputes with several large cryptocurrency companies, including well-known companies such as Coinbase and Ripple.
Picture source: Major cases in which Social Capital has been fined by the SEC over the years
The scale of fines may continue to expand
As the SEC continues to escalate its regulation of the cryptocurrency industry, we may see more large-scale fines and lawsuits in the coming years. Even so, the confrontation between cryptocurrency companies and regulatory agencies will continue, and the balance between industry development and compliance will also become an important issue in the future digital asset industry.
Overall, the new record for fines set by the SEC in 2024 highlights the regulator's tough attitude towards the cryptocurrency market and also indicates that the industry will face more severe regulatory challenges in the future. For cryptocurrency companies, how to comply with regulatory regulations while expanding functional businesses will be an unavoidable problem.
