SEC Hits Record $8.2B in 2024 Fines, Led by Terraform Case
The SEC set a record with $8.2B in 2024 penalties, driven by a $4.5B Terraform judgment, despite filing 26% fewer cases than last year.
The U.S. Securities and Exchange Commission (SEC) achieved a record-breaking $8.2 billion in financial remedies during its 2024 fiscal year, despite filing fewer enforcement cases. The agency initiated 583 cases this year, a 26% drop compared to 2023, but landmark penalties like the Terraform Labs case propelled the total to unprecedented levels.
A $4.5 billion judgment against Terraform Labs accounted for 56% of the SEC's total penalties. This case stemmed from the 2022 collapse of Terra/Luna, which destabilized the crypto market and caused massive investor losses. The SEC found Terraform Labs and its CEO, Do Kwon, guilty of defrauding investors, making it the largest monetary penalty in the SEC's history. The agency described it as one of the most significant securities fraud cases ever.
Other notable cases included a settlement with Silvergate Capital, a bank linked to crypto firms like FTX, for misleading compliance-related disclosures. Additionally, BarnBridge DAO faced charges for not registering its structured crypto assets as securities.
The SEC also emphasized its efforts to protect investors. This year, $345 million was distributed to harmed investors, bringing the total to $2.7 billion since 2021. Furthermore, the SEC processed over 45,000 tips, complaints, and referrals, including 24,000 whistleblower submissions. Whistleblower awards reached $255 million, highlighting the importance of public collaboration in identifying misconduct.
Outgoing SEC Chair Gary Gensler reaffirmed the agency's commitment to safeguarding investors and ensuring accountability. He stated that the SEC will continue to "follow the facts and the law" to hold violators responsible.
However, critics have questioned the effectiveness of the SEC's strategy. Some argue that while hefty penalties serve as deterrents and measurable milestones, they might not address deeper systemic problems in financial markets. The 2024 fiscal year demonstrated the SEC’s aggressive stance on crypto fraud, but debate continues over whether financial penalties alone are enough to achieve lasting reforms.
