(Source: CentBit.Online – Crypto & Blockchain Expert Bangladesh)
The U.S. Securities and Exchange Commission (SEC), often criticized for its stringent approach to cryptocurrency regulation, achieved a significant milestone in 2024, securing $8.2 billion in financial remedies for investors. This accomplishment came despite a 26% decline in enforcement actions during the year.
Terraform Labs Fraud Case: A Landmark Victory
The SEC’s success was largely driven by its prosecution of Terraform Labs and its founder, Do Kwon, for fraud. A jury verdict found them liable, resulting in a record $4.5 billion penalty—the largest ever obtained by the SEC after a trial. This case alone accounted for more than half of the total monetary judgments in 2024.
SEC Enforcement Actions Overview
In 2024, the SEC initiated 583 total enforcement actions, marking significant shifts in various categories:
- Stand-Alone Actions: 431 cases (-14%)
- Follow-On Administrative Proceedings: 93 cases (-43%)
- Delinquent Filing Actions: 59 cases (-51%)
Despite fewer cases, the financial impact remained impressive, with:
- $6.1 billion in disgorgement and prejudgment interest.
- $2.1 billion in civil penalties.
Key Cryptocurrency Enforcement Cases
The SEC pursued several high-profile cases in the crypto sector, including:
- Silvergate Capital: Charged for misleading disclosures on BSA/AML compliance.
- Barnbridge DAO: Penalized for unregistered securities offerings.
- HyperFund Pyramid Scheme: Involving $1.7 billion in investor losses.
- NovaTech Fraud: Affected over 200,000 investors.
- NanoBit and CoinW6: First-time actions targeting relationship investment scams.
The SEC also banned 124 individuals from serving as officers or directors of public companies, bolstering investor protection measures.
Acting as a “Crypto Cop” Amid Criticism
Despite the SEC’s achievements, its Chair, Gary Gensler, faced criticism for his tough stance on crypto markets. Set to resign on January 20, 2025, Gensler emphasized the agency’s commitment to being a “steadfast cop on the beat.” Acting Director Sanjay Wadhwa highlighted increased cooperation and self-reporting by market participants as key to enforcement success.
- The SEC processed a record 45,130 tips, complaints, and referrals, including over 24,000 whistleblower tips, resulting in $255 million in whistleblower awards.
- $345 million was distributed to harmed investors in 2024, bringing the total to $2.7 billion since FY 2021.
What Lies Ahead?
With President-elect Donald Trump set to appoint new leadership, the SEC’s regulatory approach toward cryptocurrencies may undergo significant changes. Crypto enthusiasts anticipate a shift toward a more balanced regulatory environment under Trump’s administration, potentially impacting enforcement priorities.
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