In recent years, the cryptocurrency market has developed rapidly, but with it, supervision has also increased significantly. According to a new report, U.S. regulators have collected as much as $31.92 billion in fines and settlements from multiple cryptocurrency companies since 2019. This huge amount not only reflects the turmoil in the crypto industry, but also shows the heightened attention of regulators to crypto market risks.
The United States began enforcing the crypto industry in 2019, when the SEC fined Block.one, the issuer of EOS, $24 million. Then in 2020, Telegram was fined $1.24 billion for issuing Gram tokens without registration. At the beginning of the cryptocurrency boom in 2021, stablecoin issuer Tether paid a fine of $18.5 million for falsely reporting USDT assets. Exchanges such as Poloniex and BitMEX were also fined one after another, and in 2022, BlockFi and Bittrex paid fines of $100 million and $29 million respectively. U.S. regulation has become increasingly stringent.
It is reported that since 2019, US regulators have collected approximately US$31.92 billion (approximately RMB 223.4 billion) in settlements from 25 cryptocurrency companies. These settlements include confiscations, recovery payments, civil fines, etc., but do not include lawsuits against individual executives. This growth trend reflects the regulators' tough stance on the crypto industry.
The latest data shows that a total of 8 settlements were reached in 2024, and US regulators have collected more than $19 billion (about 133 billion yuan) in fines and settlements from cryptocurrency companies. This figure set a record high, an increase of 78% from 2023 and an increase of 8,327% compared to 2022. Since this year has not yet ended, given the tough stance of US regulators, there may be more settlements before the end of this year.
It is worth noting that in the past two years, U.S. regulators have reached a total of 16 large settlements, demonstrating a significant increase in regulatory intensity. Among them, three companies have become the main targets of regulatory crackdowns: FTX, Celsius and Binance. All three companies have encountered major crises and have been investigated and sanctioned by regulatory agencies in various countries.
FTX and Alameda
The settlement amount of FTX Exchange and its sister company Alameda is second to none in the crypto industry. FTX, once a world-renowned cryptocurrency trading platform, collapsed due to financial problems in November 2022. It was not until August 2024 that FTX reached an agreement with the U.S. Commodity Futures Trading Commission (CFTC) and paid a settlement of up to $12.7 billion, which also became the case with the highest fine.
The collapse of FTX not only triggered a criminal investigation into the company's management, but also led to in-depth investigations by regulators in multiple countries. Although the company paid some fines and compensation during the restructuring process after the collapse of FTX, the legal legacy it left behind continues to ferment. Analysts pointed out that the collapse of FTX not only caused tens of thousands of investors to lose money, but also triggered a global crisis of trust.
CelsiusäžTerraform Labs
The collapse of Celsius and Terraform Labs represents a critical moment in the crypto market's shift from a bull market to a bear market. In 2024, Celsius filed for bankruptcy for failing to maintain liquidity and eventually reached a $4.7 billion settlement with the U.S. Federal Trade Commission. Terraform Labs then reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission for the collapse of its LUNA and UST. These events not only affected market sentiment, but also accelerated the strengthening of regulation.
Binance is frequently punished
As one of the world's largest cryptocurrency exchanges, Binance has been fined several times by regulators in various countries in 2024. The main reasons include the platform's failure to comply with regulatory requirements such as anti-money laundering (AML) and know your customer (KYC). Binance's global business has expanded rapidly, but the laws and regulations of different countries vary, resulting in the company facing multiple violations in different jurisdictions.
It is worth mentioning that Binance, which is still in operation, paid a fine of US$4.3 billion to the United States in 2023, becoming the only company that is still in business among all the companies that paid the fine. This phenomenon shows that despite the huge pressure on Binance in compliance, it is still working hard to maintain its market position.
in conclusion
There have been a number of large settlements in 2023 and 2024, and this trend is likely to continue in the future. As the crypto market continues to develop, regulators are likely to continue to strengthen their supervision of cryptocurrency companies, especially in terms of transparency and compliance. In this process, companies need to adapt to the new regulatory environment and actively comply to avoid high fines and legal risks.
However, although the cryptocurrency industry has experienced the impact of high fines in 2024, this does not mean that the future of the industry is bleak. On the contrary, the strengthening of supervision may be a sign of the industry's maturity and standardization. As regulatory frameworks around the world gradually improve and companies gradually adapt to and comply with these new rules, the cryptocurrency market is expected to move towards a more stable and healthy development track.
In the next few years, we may see more cryptocurrency companies take a more cautious attitude and strengthen compliance management while expanding their business. For investors, choosing companies with a good compliance record to invest in will be the best way to protect their rights and interests.
