Key facts:
SEC fines on cryptocurrency ecosystem increased 3,000% in one year.
In 2024, the SEC imposed the largest fine on record on a company, of USD 4.6 billion.
The U.S. Securities and Exchange Commission (SEC) has imposed cumulative fines amounting to $7.5 billion on the bitcoin (BTC) and cryptocurrency ecosystem since 2013, according to an analysis by Social Capital Markets.
This year is notable for the most significant fine ever imposed by the SEC, reaching USD 4.68 billion to Terraform Labs and its CEO, Do Kwon, for the collapse of its UST token and LUNA cryptocurrency, an event that had a negative impact on the cryptocurrency market.
This year’s fines reflect a dramatic increase, averaging $426 million for each of the 11 enforcement actions, compared to the $3.39 million average in 2018. This increase underscores the growing financial risk for cryptocurrency companies that do not comply with regulations.
Since its first significant action in 2013, with fines of $40.7 million, the SEC has intensified its regulatory approach. In 2023, fines totaled $150 million, rising exponentially in 2024 to $4.68 billion. an increase of 3018%.
Companies like Ripple, Telegram, and now Terraform Labs have been targeted by the SEC for unregistered token sales and violations of federal securities laws. The SEC has shown a clear intent to hold not only the companies but also their leaders accountable, evidencing a stricter and more personalized approach to regulation.
It should be noted that the SEC has been on a regulatory crusade against companies in the cryptocurrency sector, evidencing an intensification in its approach to regulatory compliance. This crusade has manifested itself in several legal and regulatory actions that have affected multiple market players.
For example, the SEC sued major exchanges like Binance, Kraken, Coinbase, Gemini, and Robinhood, alleging they sold cryptocurrencies as securities.
The SEC has also been investigating Ethereum-related developers and companies, such as Consensys, although it has closed its investigation into Ethereum 2.0, which could indicate a tacit acceptance of Ethereum as a commodity or commodity rather than a security, although legal battles continue on other fronts.
In response to the crusade, the cryptocurrency ecosystem has responded with a mix of legal defense and criticism of the SEC, accusing it of leading a move that could push innovation out of the United States.
This SEC regulatory crusade not only reflects a tightening of the enforcement of securities laws to cryptocurrencies, but has also sparked a debate about regulation versus innovation, affecting the investment and development climate in the cryptoasset sector in the United States.
This article was created using artificial intelligence and edited by a human on the editorial staff.
