Investing in crypto is a risky bet, both for investors and companies. While the former juggle the volatility of digital assets, the latter can find themselves swept away in the blink of an eye by regulators. The SEC, America’s relentless financial watchdog, has never been so severe, imposing record fines this year, notably on Terraform Labs and its founder, Do Kwon.
SEC to lash out in 2024 with historic fines
Is the SEC giving up on the battle against crypto? Not really. In fact, 2024 marks a turning point in SEC's Crusade Against the Crypto Industry. With $4.68 billion in fines inflicted, either 63% of the total accumulated since 2013the commission brought out the big guns.
The most emblematic case? Terraform Labs and its co-founder Do Kwonguilty of offering unregistered securities and misleading investors.
An exemplary punishment that reflects theincreasingly muscular approach of the SEC.
- 3018% increase in fines between 2023 and 2024
- $426 million fine per case on average
- $7.42 billion in penalties since 2013
In comparison, theyear 2023 almost seemed like a recreation with only 150 million fines.
This rise in power is part of the SEC's desire to strictly regulate the digital asset market. No more small sanctions, make way for Mega fines to make an impression and deter the players to take liberties with the law.
A muscular crypto strategy: targeting the big fish
From its timid beginnings in 2013, where it only distributed $40.7 million in finesthe SEC has changed a lot. Now the goal is clear: aim for the big fish of the crypto industry.
In 2019, Telegram fined $1.24 billionAnd Ripple, issuer of crypto XRP, suffered a $125 million penalty in 2021In recent years, the agency has gone beyond just hitting companies to targeting executives, as evidenced by the Barksdale affair in 2022.
In 2024, the regulator adopts a much more aggressive approach. Instead of accumulating small fines, the strategy is to hit hard at a few big players to set precedents.
This move shows that the SEC is determined to bring order to the crypto Wild West, even if it means leaving a few carcasses behind.
If Gary Gensler, already feared as head of the SEC, were to become US Treasury Secretary under Kamala Harris, could the crypto community still breathe?
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