The U.S. Securities and Exchange Commission (SEC) achieved its highest-ever annual financial remedies in fiscal year 2024, collecting $8.2 billion in penalties and fines, according to its November 22 annual report. This record-breaking total was largely driven by the $4.47 billion settlement with Terraform Labs and its former CEO, Do Kwon.
Terraform Labs Case Drives Historic Numbers
The SEC’s enforcement actions in 2024 totaled 583 cases, a 26% decrease compared to the previous year. Despite fewer cases, the financial penalties soared, thanks to Terraform Labs’ settlement over fraud charges related to its blockchain ecosystem’s collapse in 2022, which caused billions in investor losses.
- Terraform’s Impact: Without the $4.47 billion settlement, the SEC’s financial remedies would have totaled $3.72 billion, its lowest since 2013, when it collected $3.4 billion.
- Breakdown of Collections: The SEC secured $2.1 billion in penalties and a record $6.1 billion in disgorgements, representing illicit profits returned to harmed investors.
Crypto-Related Enforcement Declines
Under outgoing SEC Chair Gary Gensler, the agency took a tough stance on cryptocurrency firms.
- Crypto Actions: The SEC pursued 46 crypto-related cases in 2023, but this number dropped to 11 in 2024. However, penalties from crypto enforcement skyrocketed over 3,000%, primarily due to the Terraform settlement.
- Gensler’s Tenure: Gensler described the SEC’s approach as being a “steadfast cop on the beat” to hold wrongdoers accountable. His nearly four-year tenure ends on January 20, 2025, coinciding with President-elect Donald Trump’s inauguration.
Looking Ahead: Crypto Regulation Under Trump
President-elect Trump has pledged to ease regulatory enforcement, including in the crypto space. Legal experts anticipate a softer approach:
- Industry Optimism: Pantera Capital’s chief legal officer, Katrina Paglia, predicted that many ongoing crypto lawsuits could “quietly go away” during Trump’s administration.
- Regulatory Shift: A more lenient stance could mark a significant departure from the SEC’s aggressive enforcement under Gensler, which has been a defining feature of his leadership.
