SEC Generates $8.2B in Remedies in FY24, With 56% from Terraform Labs
In the fiscal year 2024, the Securities and Exchange Commission (SEC) made headlines by collecting a record $8.2 billion in recoveries and fines. This increase was primarily driven by the SEC’s actions against algorithmic stablecoin issuer Terraform Labs and its CEO, Do Kwon. In fact, a whopping 56% of the total remedies collected by the SEC came from Terraform Labs and Kwon.
The settlement between the SEC and Terraform Labs involved securities fraud charges, with the company agreeing to pay $4.5 billion in recovery and civil penalties earlier in the year. This lawsuit was just one of several high-profile actions taken by the SEC against crypto companies. For example, Ripple Labs faced a lawsuit that resulted in a $125 million order against the company, which Ripple Labs has since appealed.
Out of the $8.2 billion collected by the SEC, $6.1 billion came from recovery and interest, marking a new high in the agency’s enforcement history. Additionally, the SEC collected $2.1 billion in civil penalties, the second-highest amount on record.
Despite these significant financial achievements, the SEC saw a 26% decline in enforcement actions filed in fiscal year 2024, with a total of 583 actions taken. However, the agency set another record by receiving 45,130 tips, complaints, and referrals. Furthermore, the SEC distributed $345 million to harmed investors, bringing the total amount returned to investors to over $2.7 billion since 2021.
Looking ahead, the upcoming change in administration could lead to shifts in the SEC’s priorities, particularly in relation to cryptocurrencies. The current SEC Chair, Gary Gensler, is set to step down on January 20, coinciding with the inauguration of President Trump. While a replacement for Gensler has not yet been confirmed, there have been discussions in the media about potential crypto-friendly candidates for the top regulatory position.
The next SEC Chair will oversee critical crypto litigations, including ongoing cases with Coinbase and Binance. Interestingly, Coinbase has also sued the SEC for clarity on crypto rules, adding another layer of complexity to the regulatory landscape.
