SEC Fines Total $8.2 Billion in 2024, Over Half from Terraform
The United States Securities and Exchange Commission (SEC) had a banner year in 2024 when it comes to enforcement actions. Thanks to a major settlement with Terraform Labs, the SEC raked in a record-breaking $8.2 billion in penalties and fines. This is the highest amount in SEC history, with $6.1 billion going towards disgorgement and prejudgment interest, and $2.1 billion in civil penalties.
While the total number of enforcement actions decreased by 26% compared to the previous year, it’s no surprise considering that a whopping 56% of the $8.2 billion came from the SEC’s successful case against Terraform Labs and its former CEO, Do Kwon.
For those unfamiliar with the Terraform saga, it all started in May 2022 when the company’s UST stablecoin lost its peg to the U.S. dollar, causing chaos in the digital asset space. The fallout led to a crash in the company’s native token, LUNA, wiping out an estimated $60 billion.
After a lengthy legal battle, Terraform and Kwon were found guilty of securities fraud in April 2024 and agreed to pay a hefty $4.47 billion settlement. SEC Chair Gary Gensler hailed the Division of Enforcement for holding wrongdoers accountable and emphasized the importance of ensuring market integrity for investors and issuers.
Gensler will be stepping down from his position in January 2025, sparking speculation about his replacement. One top contender is SEC Commissioner Hester Peirce, known as “Crypto Mom” for her softer approach towards digital assets. Other potential candidates include pro-crypto advocates like Mark Uyeda and former SEC Commissioner Dan Gallagher.
Whoever takes over as SEC Chair in the upcoming year will face the challenge of balancing the interests of the crypto community with the agency’s mandate of protecting investors and maintaining regulatory oversight. It will be interesting to see how the SEC navigates these waters in the future.
