U.S. regulators have stepped up their regulatory efforts on cryptocurrency companies over the past two years. According to the latest report from CoinGecko, U.S. regulators have received more than $19 billion in litigation settlements from cryptocurrency companies so far in 2024, a 78% surge from 2023.
CoinGecko recently released a report stating that so far in 2024, U.S. regulators have received more than $19 billion in litigation settlements from cryptocurrency companies. Among them, the bankrupt exchange FTX and its affiliated trading company Alameda received the largest amount, agreeing in August to pay $12.7 billion in settlement to the Commodity Futures Trading Commission (CFTC).
Settlement amounts surge this year
With eight settlements reached in 2024, the amount received by U.S. regulators has increased by 78% compared to 2023, when only $10.87 billion was received, while compared to 2022, the amount of settlements so far this year has increased by 8,327%.
The total settlement amount includes disgorgement, recovery, civil penalties, settlements and prejudgment interest, but does not include actions against individual executives.
Lim Yu Qian, a research analyst at CoinGecko, said that the collapse of Celsius and Terraform Labs in mid-2022 was a key event in the transition of the cryptocurrency bull market to the bear market, which eventually led to the collapse of FTX and prompted a new wave of regulatory scrutiny in the United States.
Terraform Labs reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC) over the 2022 LUNA and UST collapses, the second-largest settlement amount this year.
The third largest settlement amount in 2024 was with the bankrupt cryptocurrency lender Genesis, which reached a $2 billion settlement with the New York Attorney General's Office in August. Genesis filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in January 2023.
$31.92 billion in settlements received
As the year is not over yet, there may be more settlements before the end of the year given the tough stance of U.S. regulators, who have collected approximately $31.92 billion in settlements from 25 cryptocurrency companies since 2019.
Lim Yu Qian mentioned that in 2023, the $4.3 billion settlement reached by Binance with the U.S. Department of Justice, the Treasury Department, the CFTC and other agencies is worthy of attention because Binance is the only company with a settlement amount of more than $1 billion that is still in operation.
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