The United States Securities and Exchange Commission (SEC) achieved a new record for penalties and fines in the fiscal year 2024, largely due to a substantial settlement with cryptocurrency firm Terraform Labs. According to the SEC’s annual report released on Nov. 22, the agency netted $8.2 billion in financial remedies, marking the highest total in SEC history despite a 26% decrease in the number of enforcement actions compared to the previous year.
A significant portion of the total came from the SEC’s court victory against Terraform Labs and its former CEO Do Kwon. The settlement resulted in a $4.47 billion penalty after Terraform was found liable for fraud following the collapse of its blockchain ecosystem in 2022, which led to billions in losses for investors.
Without the Terraform settlement, the SEC’s financial remedies would have amounted to $3.72 billion, which would have been the lowest total since 2013, when the agency collected $3.4 billion in fines and penalties. This year’s penalties included $2.1 billion in fines and a record $6.1 billion in disgorgement, which refers to the return of illicit profits to harmed investors.
Outgoing SEC Chair Gary Gensler commented on the record year, stating, “The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable.” Gensler’s nearly four-year tenure will come to an end on Jan. 20, 2025, coinciding with the inauguration of President-elect Donald Trump.
Under Gensler’s leadership, the SEC took a stringent stance on cryptocurrency firms, peaking in 2023 with 46 crypto-related enforcement actions. In 2024, the number of crypto cases dropped to 11, but fines linked to the SEC’s crypto actions surged by over 3,000% due to the Terraform settlement.
The U.S. crypto industry is hopeful that the regulatory crackdown may ease under the incoming administration. President-elect Trump has indicated plans to relax enforcement measures, with Pantera Capital’s chief legal officer Katrina Paglia suggesting that many of the SEC’s ongoing crypto lawsuits could “quietly go away” once Trump begins his term.