Crypto: Regulatory Hammer Falls as SEC Slaps Fines Worth $7.42 Billion Since 2013
All eyes are now upon the United States government because its chief regulating body, the SEC, has been acting hard and fast to ensure companies and business people in crypto follow all the rules. According to data from the Social Capital Markets report, the accumulated fines since 2013 have now climbed up to the staggering sum of $7.42 billion, of which the Commission managed to collect no less than $4.68 billion in just 2024 alone.
A Rising Tide of Fines
In 2024, the SEC significantly escalated its enforcement activity against cryptocurrency firms. The $4.68 billion in fines represents a 3,000% increase compared to 2023. This unprecedented spike in penalties was primarily driven by one case: a $4.67 billion fine against Terraform Labs and its founder, Do Kwon, after the TerraUSD stablecoin collapsed.
It brought only 11 enforcement actions this year, compared with 30 last year, yet the average fine from the SEC this year came in at an unprecedented $426 million. That suggests that it’s bringing fewer cases but ones that are much larger and set precedents for the wider industry.
Billions in Fines for Crypto Industry Leaders
Besides the Terraform Labs case, the SEC has imposed serious fines on other well-known crypto firms. One of the biggest companies in the space, Ripple Labs, was ordered to pay a $125-million fine back in 2021 over the sale of XRP as an unregistered security. The Ripple case raised the hackles of many in the crypto community since involved parties felt strongly that XRP was a digital asset and not a security.
That was in 2019 when Telegram Group Inc. received a record fine of $1.24 billion for an unregistered token offering intended for its Telegram Open Network, TON. The intervention by them finally brought that ambitious project to its knees and put others on notice that raising money through token sales would be viewed as akin to the sale of securities.
SEC Targets Firms and Executives Alike
The commission has not limited its enforcement only to the corporation itself, but also to individual executives. Since 2020, the agency has imposed a total of $5.08 billion in fines holding both firms and their leadership accountable. This dual approach by the SEC demotes its will to punish decision-makers as much as the corporate entities themselves.
Its move set the tune for what the future holds in the regulation of digital currency: absolute compliance, for which the penalties will increase only as the market matures.
