Crypto Crackdown: SEC Secures $8.2 Billion in Financial Remedies for 2024

Despite facing criticism from the cryptocurrency community, the U.S. Securities and Exchange Commission (SEC) recorded a landmark achievement in 2024, obtaining $8.2 billion in financial remedies for investors. This accomplishment came even as the total number of enforcement actions fell by 26%.

A significant portion of this success stemmed from the agency's decisive legal action against Terraform Labs. Following a jury verdict that found Terraform Labs and its founder Do Kwon guilty of fraud, the defendants were ordered to pay over $4.5 billion in penalties, the largest monetary judgment ever secured by the SEC in a trial. This single case accounted for more than half of the total financial remedies collected by the agency in 2024.

SEC Enforcement Actions: Key Metrics for 2024

The SEC reported 583 enforcement actions this year, showcasing notable shifts across categories:

• Stand-Alone Actions: 431 cases, a 14% decrease from the previous year.
• Follow-On Administrative Proceedings: 93 cases, down 43%.
• Delinquent Filing Actions: 59 cases, reflecting a 51% decline.

Despite these decreases, the financial remedies were substantial, comprising:

• $6.1 billion in disgorgement and prejudgment interest.
• $2.1 billion in civil penalties.

Crypto Enforcement Highlights

The SEC's enforcement actions in the cryptocurrency sector included several high-profile cases:

• Terraform Labs: The agency’s historic $4.5 billion judgment.
• Silvergate Capital: Charged for misleading disclosures related to Bank Secrecy Act and Anti-Money Laundering compliance.
• Barnbridge DAO: Targeted for unregistered securities offerings.
• HyperFund Pyramid Scheme: A $1.7 billion fraud case.
• NovaTech Ponzi Scheme: Impacting 200,000 investors.
• NanoBit and CoinW6 Scams: First-time enforcement actions addressing relationship investment fraud.

The SEC also pursued investor protection measures, barring 124 individuals from serving as officers or directors of public companies.

Broader Impact and Leadership Reflections

Under SEC Chair Gary Gensler, the Division of Enforcement maintained its role as a "steadfast cop on the beat." Acting Director Sanjay Wadhwa highlighted increased cooperation and self-reporting among market participants.

Despite facing backlash from the crypto community for his stringent regulatory approach, Gensler oversaw the distribution of $345 million to harmed investors in 2024 and a record 45,130 tips, complaints, and referrals. These included more than 24,000 whistleblower tips, resulting in $255 million in whistleblower awards.

Since fiscal year 2021, the SEC has returned over $2.7 billion to investors, underscoring its commitment to investor protection.

With Gensler set to resign on January 20, his tenure leaves a legacy marked by aggressive enforcement and significant financial recoveries, a testament to the SEC’s intensified efforts in the crypto space.