SEC Nets Record $8.2B in Enforcement Actions for 2024

The U.S. Securities and Exchange Commission (SEC) has announced that it secured $8.2 billion in enforcement actions in 2024.

This is the largest amount the commission has ever recovered, with significant contributions coming from the high-profile Terraform Labs case.

Terraform Labs Leads SEC Recoveries

According to a November 22 report, the SEC’s enforcement actions for 2024 included 583 cases, a 26% decrease from the previous year. Among these, 431 were standalone actions, 93 were follow-up cases against individuals with orders against them, including criminal convictions and civil injunctions, and another 59 were against companies that had failed to make necessary filings with the agency.

Gary Gensler, the regulator’s outgoing chair, emphasized that its main priority is to protect investors, particularly in the cryptocurrency sector, which has faced increasing risks due to its rapid growth.

“The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable,” Gensler said.

Despite the drop in cases, the SEC recovered $6.1 billion in disgorgement and $2.1 billion in penalties. More than half of the total came from one of the largest cryptocurrency-related fraud incidents involving Terraform Labs, a blockchain technology company co-founded by Do Kwon and Daniel Shin.

The SEC had accused the company and Do Kwon of committing large-scale fraud that caused billions of dollars in investor losses when its algorithmic stablecoin TerraUSD (UST) and its associated cryptocurrency, LUNA, collapsed. The two parties were ordered to pay the regulator $4.5 billion following a court battle.

The report also revealed actions against other crypto-related scams, such as HyperFund and NovaTech Ltd. The two, purporting to be crypto investment platforms, raised more than $2.2 billion from investors worldwide. All their principals have been charged with operating fraudulent schemes, with HyperFund co-founder Brenda Chunga opting to settle the charges.

A Strategic Shift

According to a separate Social Capital Markets release, while the number of crypto-related cases brought by the SEC dropped to 11 in 2024, the fines associated with these actions surged by over 3,000% compared to $150.3 million in 2023.

Social Capital Markets also cited the Terraform Labs settlement as the main reason for the dramatic increase in fines paid. Further, its report suggested that the SEC is shifting its focus toward more high-profile and influential cases, signaling a strategic change in the agency’s enforcement approach.

Under Gensler, the financial watchdog earned a harsh reputation for its intense scrutiny of crypto companies. However, despite the crackdown, the U.S. digital asset industry remains optimistic that regulatory pressures will ease, particularly following President Donald Trump’s re-election.

Trump previously vowed to fire Gensler as one of his campaign promises. Meanwhile, the under-fire regulatory chief recently confirmed that he will step down from the role in January 2025, just in time for Trump’s inauguration.