Thomas Daniels
The U.S. Securities and Exchange Commission (SEC) achieved a record $8.2 billion in financial remedies in 2024, showcasing the agency’s efficacy despite facing criticism for its stringent approach to cryptocurrency regulation. This accomplishment comes alongside a notable 26% decline in overall enforcement actions.
Record Penalties Lead the Way
The landmark case against Terraform Labs was pivotal in securing the SEC’s historic achievement. A jury found the firm and its founder, Do Kwon, liable for fraud, resulting in a $4.5 billion judgment—the largest penalty ever obtained by the SEC following a trial. This single case accounted for more than half of the year’s monetary judgments.
Shifts in Enforcement
The SEC reported 583 enforcement actions in 2024, reflecting significant changes across categories:
- 431 stand-alone actions: A 14% decrease.
- 93 follow-on administrative proceedings: Down by 43%.
- 59 delinquent filing actions: Declined by 51%.
Despite fewer cases, financial remedies remained robust, with $6.1 billion collected in disgorgement and prejudgment interest and an additional $2.1 billion in civil penalties.
Crypto Sector Focus
The SEC aggressively pursued high-profile cryptocurrency cases, including charges against:
- Silvergate Capital: For misleading disclosures on Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance.
- Barnbridge DAO: For offering unregistered securities.
- HyperFund and NovaTech: Fraud cases involving $1.7 billion and 200,000 affected investors.
Emerging trends in enforcement included targeting relationship investment scams, with actions against NanoBit and CoinW6 marking first-time prosecutions in this area.
Success in Investor Protection
The SEC’s Division of Enforcement maintained a strong track record, winning all five federal district court cases in 2024, including its high-profile crypto trial against Terraform Labs. Additional investor protection efforts included barring 124 individuals from serving as officers or directors of public companies.
SEC Chair Gary Gensler praised the agency’s role as a “steadfast cop on the beat,” while Acting Director Sanjay Wadhwa highlighted growing cooperation and self-reporting among market participants. Despite criticism from the crypto industry, the SEC distributed $345 million to harmed investors in 2024 and processed a record 45,130 tips, complaints, and referrals. These included over 24,000 whistleblower tips, resulting in $255 million in awards.
Legacy and Outlook
Since 2021, the SEC has returned more than $2.7 billion to investors, cementing its reputation as a powerful force in financial enforcement. Gensler, set to step down as SEC Chair on January 20, leaves a legacy marked by controversial yet impactful crypto regulation.
