Amid strict regulation in the US, regulators have racked up as much as $19.45 billion in settlements with crypto-related companies in 2024.

With just two months left in the year, 2024 could surpass 2023 in the number of deals due to regulatory tightening.

Learn about companies' agreements with regulators in the US

As crypto enforcement actions in the U.S. continue, a report from CoinGecko indicates that regulators have amassed $19.45 billion from eight settlements so far this year. This represents a 78.9% increase in settlement value compared to 2023, placing 2024 higher in the rankings for lawsuit settlements.

The report details the U.S. regulators’ crackdown on failed crypto exchange FTX and its sister company Alameda Research, which they say is the largest crypto enforcement action in terms of penalties.

Read more: Understanding the collapse of FTX

In total, the two paid fines of up to $12.7 billion by August 2024, with the U.S. Commodity Futures Trading Commission (CFTC) leading the crackdown.

BeInCrypto reported that the funds are intended to compensate FTX customers and creditors, with claims reaching $11.20 billion. Crypto lending firm Celsius comes next on the list with $4.7 billion in settlement fees. In third place is Terraform Labs, the instigator of the 2022 bear market, which paid out $4.5 billion.

US Regulators’ Deals with Crypto Companies. Source: CoinGecko Report

Finally, Binance, the largest crypto exchange by trading volume, comes in fourth. The exchange paid $4.3 billion in a settlement that forced its former CEO Changpeng Zhao to resign. These actions culminated in his four-month prison sentence.

FTX started wave of deals

Sixteen of the top 25 crypto settlements with U.S. regulators occurred between late 2022 and 2024. This comes on the heels of increased regulatory scrutiny following the implosion of Sam Bankman-Fried’s (SBF) crypto empire, FTX.

Indeed, the incident has exposed the corruption that can exist within crypto-related entities, leading to heightened regulatory scrutiny to protect investors.

Monetary Agreements with US Regulators. Source: CoinGecko

Crypto regulation in the US is still controversial

Some have linked the rise in regulatory crackdowns in the US, particularly by the Securities and Exchange Commission (SEC), to the rise of Gary Gensler as chairman of the agency. This comes after a joint statement from the commission revealed that in fiscal year 2023, the SEC’s enforcement division took 784 actions, resulting in $4.9 billion in penalties and attrition.

“Since Chairman Gensler took office on April 17, 2021, the SEC has increasingly turned to the courts to establish its policy positions — confirming what the industry has long known about regulation by enforcement,” said Brendan Malone, Policy Manager at Paradigm.

Malone revealed that 92% of the SEC’s actions against the crypto industry under Gensler involved registration violations, 5% more than actions under previous SEC chairs.

Along the same lines, Paradigm’s VP of Government Affairs, Alexander Grieve, detailed what is wrong with the US SEC’s policies. He cited a ready hand to sound the Wells Notice buzzer, forum-picking and a dumbbell approach, all of which undermine the regulator’s enforcement efforts.

Meanwhile, the SEC and other regulators have advocated for enhanced regulatory oversight, citing investor protection. However, the general sentiment among industry supporters is that strict regulation in the U.S. drives innovation overseas.

Finally, regions like Hong Kong and the Middle East are benefiting from this outlook due to their favorable stance towards cryptocurrencies.

The article US Crypto Deals Near $20 Billion by 2024 appeared first on BeInCrypto Brasil.