The battle between US regulators and crypto companies has intensified, with nearly $32 billion collected in settlements since 2019, according to a report by CoinGecko. The most significant regulatory action to date has been against the now-defunct crypto exchange FTX and its trading firm affiliate, Alameda.
The Commodity and Futures Trading Commission (CFTC) imposed a combined $12.7 billion in penalties on these companies, a settlement announced in August 2024, nearly two years after FTX’s collapse.
FTX and Binance
Binance, however, stands out as the largest operational company to face such a steep penalty. In November 2023, the leading crypto exchange agreed to pay $4.3 billion to settle with several US regulatory bodies, including the Department of Justice and the Treasury Department.
FTX’s implosion in late 2022 catalyzed a wave of heightened scrutiny on the crypto industry. In 2023 alone, US regulators secured $10.87 billion in settlements, a staggering 8,327% increase from the previous year. But 2024 saw even more aggressive action, with eight major lawsuits settled, totaling $19.45 billion by October.
Another high-profile case was Celsius's collapse, which led to a $4.7 billion settlement. During the same period, Terraform Labs fell and faced $4.5 billion in penalties.
Crypto Regulations
While the spotlight has been on recent enforcement actions, regulators began targeting the crypto space well before the FTX collapse. In 2019, Block.one (now B1), the company behind the EOS token, was fined $24 million by the SEC for selling unregistered securities.
A year later, the SEC secured a $1.24 billion settlement from Telegram over its Gram token offering, a case that reverberated throughout the crypto world. Amid the bull market of 2021, Tether, one of the industry’s most prominent stablecoin issuers, settled for $18.5 million with the New York Attorney General.
The CFTC also took action against Tether’s parent company, Bitfinex, for illegal transactions, though that settlement was significantly smaller at $1.5 million.The Department of Justice and the Treasury Department have played increasingly prominent roles, targeting not just defunct firms like FTX but also current industry giants like Binance.
As of October 2024, there have been 25 enforcement actions with settlements exceeding $10 million, contributing to the nearly $32 billion total.
This article was written by Jared Kirui at www.financemagnates.com.
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