SEC Fines Total $8.2B in 2024, Over Half from Terraform
The Securities and Exchange Commission (SEC) had a record-breaking year in fiscal year 2024, thanks in large part to a major settlement with Terraform Labs. The agency announced in its annual report on November 22 that it had secured a total of $8.2 billion in financial remedies by the end of September, the highest amount in SEC history. This included $6.1 billion in disgorgement and prejudgment interest, as well as $2.1 billion in civil penalties – the second-highest amount on record.
Despite the impressive numbers, the SEC reported a 26% decrease in total enforcement actions compared to the previous year, with a significant portion of the $8.2 billion coming from the Terraform Labs case. This particular case involved Terraform’s UST stablecoin losing its peg to the US dollar in May 2022, leading to a series of events that ultimately resulted in a crash and the loss of an estimated $60 billion in the digital asset space.
Following a lengthy trial, the SEC charged Terraform and its former CEO, Do Kwon, with securities fraud in February 2023. In April of this year, a jury found the company and its founder liable for securities fraud, leading to a $4.47 billion settlement.
SEC Chair Gary Gensler, who will be stepping down in January 2025, described the Division of Enforcement as a committed force in holding wrongdoers accountable and promoting market integrity. His resignation has sparked speculation about his replacement, with names like Hester Peirce, also known as “Crypto Mom,” and Mark Uyeda being mentioned as potential candidates.
Whoever takes on the role of SEC chair next will face the challenge of balancing the needs of a pro-crypto president with the agency’s duty to protect consumers and maintain regulatory oversight. It will be interesting to see how this dynamic plays out in the coming months.
