According to Decrypt, the U.S. Securities and Exchange Commission (SEC) announced that it collected a record $8.2 billion in penalties during the fiscal year 2024. This marks the highest amount in the agency's history, with over half of the total—$4.5 billion—stemming from the SEC's case against Terraform Labs and its founder, Do Kwon. Terraform Labs was responsible for the Terra blockchain ecosystem, which collapsed in May 2022 after its algorithmic stablecoin TerraUSD (UST) lost its dollar peg, leading to a $60 billion loss and significant investor fallout. Without the settlement from this case, the SEC's financial remedies would have been the lowest since 2013, at $3.72 billion.
Despite a 26% decrease in enforcement actions to 583 cases, the SEC's financial recoveries increased by 65.5% compared to 2023. The agency views these enforcement actions as a victory for investor protection. However, the crypto industry is anticipating changes with the upcoming departure of SEC Chair Gary Gensler, who announced he would step down by January 20, 2025, following Donald Trump's re-election. Trump has promised a more crypto-friendly SEC leadership, criticizing Gensler's tenure as an "anti-crypto crusade."
Ripple Labs’ Chief Legal Officer, Stuart Alderoty, criticized the SEC's announcement, comparing it to a professor boasting about high failure rates and cheating scandals, suggesting it reflects poor oversight rather than success. Under Gensler's leadership, the SEC has targeted several high-profile crypto firms. Silvergate Bank was fined $90 million for misleading investors about its anti-money laundering practices, while Barnbridge DAO faced a $7 million penalty for selling unregistered securities. Additionally, NovaTech Ltd. was charged with operating a $650 million Ponzi scheme affecting over 200,000 investors globally. Smaller scams, including pre-IPO frauds and pyramid schemes like HyperFund, contributed to hundreds of millions in fines and penalties.