The U.S. Securities and Exchange Commission (SEC) witnessed a 30% reduction in cryptocurrency-related enforcement actions during 2024, the final year under Chair Gary Gensler. According to a Jan. 23 report from Cornerstone Research, the SEC initiated 33 enforcement actions in 2024 while 2023 saw a record 47 cases.
Fewer Actions, but Higher Penalties
Although the number of enforcement actions fell, the penalties imposed in 2024 reached an all-time high, totaling nearly $5 billion. This was primarily driven by the SEC’s $4.5 billion settlement with Terraform Labs, which accounted for the majority of the year’s fines. The 2024 penalties were over three times higher than the previous record set in 2020 during a $1.24 billion settlement with Telegram Group.
The SEC’s actions in 2024 targeted a total of 90 defendants, including 57 individuals and 33 firms. Notably, the proportion of cases involving administrative proceedings dropped by over 50%, as the agency shifted its focus toward litigation.
Fraud and Securities Violations Lead Allegations
Fraud allegations dominate the crypto-related cases in 2024, with 50% of actions involving such allegations.
50% of SEC’s actions involve fraud allegations. Source: Cornerstone ReasearchViolations related to unregistered securities offerings followed closely, appearing in 58% of cases. In some instances, the SEC combined these allegations with accusations of market manipulation or failures to register as broker-dealers.
Since 2013, nearly half of the SEC’s cryptocurrency enforcement actions have been tied to initial coin offerings (ICOs) and non-fungible tokens (NFTs). This trend persisted in 2024, with eight enforcement actions targeting ICOs and one case involving NFTs.
SEC’s Crypto Enforcement Action Increased 80% Under Gensler Tenure
A significant portion of the SEC’s enforcement activity in 2024 was concentrated in September and October. SEC launched only four new actions after the November elections. This slowdown coincided with a period of leadership transition as Gary Gensler prepared to leave his role as SEC Chair on Jan. 20, following the inauguration of President Donald Trump.
Under Gensler’s leadership, the SEC pursued nearly 80% more crypto-related enforcement actions compared to the tenure of his predecessor, Jay Clayton.
SEC Cryptocurrency Enforcement Actions under Jay Clayton (2017-2020) and Gary Gensler (2021-2024). Source: Cornerstone ResearchGensler’s administration focused on addressing systemic issues in the crypto industry, often targeting major players and high-profile cases.
The SEC’s approach to cryptocurrency regulation is already undergoing changes under the new acting chair, Mark Uyeda. On Jan. 23, the agency repealed the controversial Staff Accounting Bulletin 121, which required banks and financial firms to record crypto holdings as liabilities on their balance sheets.
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