SEC Secures $4.7 Billion From Crypto Enforcement This Year, A 3,018% Surge Driven By Terraform Labs Settlement

The
Securities
and
Exchange
Commission
(SEC)
has
secured
$4.7
billion
in
crypto-related
enforcement
actions
in
2024,
marking
a
staggering
3,018%
increase
from
last
year,

according
to
Social
Capital
Markets.

This
surge
was
largely
driven
by
the
agency’s
record-breaking
$4.47
billion
settlement
with
Terraform
Labs
and
its
former
CEO,
Do
Kwon,
in
June.

That
was
the
SEC’s
“largest
enforcement
action
to
date,”
according
to
a
Sept.
9

report
from
Social
Capital
Markets,

SEC
Targets
Higher
Profile
Cases

The
total
amount
comprises
forfeiture,
civil
penalties,
settlement,
disgorgement,
and
pre-judgment
interest.
Although
the
collective
dollar
amount
of
the
regulator’s
enforcement
actions
has
spiked
3,018%
in
the
last
year,
there
has
been
a
drop
in
the
number
of
cases
the


SEC

pursued.

Only
11
enforcement
actions
were
initiated
against
crypto
firms
by
the
SEC
this
year,
which
is
19
fewer
actions
compared
to
last
year.

“This
trend
indicates
a
strategic
shift
by
the


SEC

toward
fewer
but
larger
fines,
with
a
focus
on
making
high-impact
enforcement
actions
that
set
precedents
for
the
entire
industry,”
said
Social
Capital
Markets.

46%
Of
Fines
Imposed
Since
2020
Have
Been
Below
$1
Million

Following
the
settlement
with
Terraform
Labs
and
Do
Kwon,
the
next
biggest
fine
was
issued
to
the
messaging
network
Telegram
in
2019.
In
this
case,
Telegram
was
slapped
with
a
$1.24
billion
action,
which
comprised
$18.5
million
in
civil
penalties
and
$1.2
billion
in
disgorgement
paid
back
to
investors.

The
SEC
asked
for
$2B,
and
the
Court
reduced
their
demand
by
~94%
recognizing
that
they
had
overplayed
their
hand.
We
respect
the
Court’s
decision
and
have
clarity
to
continue
growing
our
company.

This
is
a
victory
for
Ripple,
the
industry
and
the
rule
of
law.
The
SEC’s…

—
Brad
Garlinghouse
(@bgarlinghouse)

August
7,
2024

In
the
four
years
after
Telegram’s
case,
fines
from
the
regulator
have
hovered
between
$5
million
and
$35.2
million
before
Terraform
Labs
pushed
the
average
substantially
higher.

During
this
period,
46%
of
the
fines
imposed
have
been
below
$1
million.
Meanwhile
30%
of
the
fines
have
been
between
$1
million
and
$10
million.

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