Crypto settlements near $20B in 2024 as US regulations tighten

US regulators have secured $19.45 billion from crypto-related settlements in 2024, marking a 78.9% increase from 2023. 

This rise comes amidst heightened regulatory scrutiny, with major firms such as FTX (CRYPTO:FTT) and Alameda Research paying the largest fines of the year, totaling $12.7 billion in penalties. 

These funds were directed toward compensating FTX customers and creditors, whose claims reached $11.2 billion.

A CoinGecko report revealed that, so far in 2024, eight major settlements have contributed to the nearly $20 billion total, making this year a significant one for crypto enforcement. 

Bankrupt crypto lender Celsius followed with a $4.7 billion settlement, while Terraform Labs, which contributed to the 2022 market downturn, paid $4.5 billion. 

Binance, the world’s largest crypto exchange, settled for $4.3 billion, a move that led to the resignation and four-month imprisonment of its former CEO, Changpeng Zhao.

These regulatory actions, particularly following the collapse of FTX, have sparked a broader clampdown on the industry. 

The US Securities and Exchange Commission (SEC) has been at the forefront of these efforts, with Chair Gary Gensler increasing the agency’s enforcement actions since his appointment in 2021. 

In the SEC’s 2023 fiscal year, the agency took 784 enforcement actions, resulting in $4.9 billion in penalties.

Critics argue that the aggressive approach by US regulators, especially under Gensler, has led to a regulatory environment focused on enforcement rather than collaboration. 

According to Paradigm’s Brendan Malone, 92% of the SEC’s actions under Gensler have targeted registration violations. 

Alexander Grieve, Paradigm’s VP of Government Affairs, echoed concerns about the SEC’s tactics, criticising its approach to enforcement.