SEC Imposes $8.2 Billion in Financial Penalties in FY2024, Highest on Record
Terraform Labs’ Nearly $4.5 Billion Settlement with the SEC Makes for a Record Year for Financial Penalties
The U.S. Securities and Exchange Commission (SEC) had a record fiscal year in FY2024, with $8.2 billion in fines, the largest being the Terraform Labs settlement. This was the highest penalty in SEC history, despite a 26% decrease in enforcement actions from the previous year to 583.
More than half of that amount — $4.47 billion — came from a legal victory against Terraform Labs and former CEO Do Kwon, after they were charged with fraud in connection with the collapse of Terraform’s blockchain ecosystem in 2022, the SEC said in its annual report on Nov. 22. Without the fine, the SEC would have collected just $3.72 billion, which would have been the lowest since 2013.
More specifically, in fiscal year 2024, the SEC collected $2.1 billion in fines and set a record of $6.1 billion in illegal profits refunded to investors who suffered losses. Outgoing SEC Chairman Gary Gensler called the result of “a steadfast enforcement agency that investigates and prosecutes based on the facts and the law.”
Under Gensler’s leadership, the SEC has taken a tough stance on crypto companies. The number of lawsuits filed in the sector also peaked at 46 last year, but fell to 11 in 2024. However, the amount of fines from crypto lawsuits increased by more than 3,000% over the same period.
2024 also marks the end of Gensler’s nearly four-year tenure, with him stepping down on January 20, 2025, coinciding with Donald Trump’s inauguration as US President.
The crypto industry is hoping that the new administration will bring a brighter regulatory outlook. Trump has pledged to ease enforcement. Katrina Paglia, chief legal officer at Pantera Capital, believes that many SEC lawsuits against crypto companies will “quietly disappear” under Trump.
Overall, the SEC has enjoyed a historic financial performance thanks to its strong stance on the crypto industry, but the landscape of its oversight could change as the Trump administration begins its second term.
