- SEC crypto enforcement dropped 30% in Gensler’s final year, with 33 actions initiated in 2024.
- SEC penalties reached a record $5 billion in 2024, with fraud charges in 73% of cases.
- SEC repealed Bulletin 121 under acting chair Mark Uyeda, signaling potential regulatory shifts for crypto.
The U.S. Securities and Exchange Commission (SEC) witnessed a 30% drop in crypto-related enforcement actions during the final year of Gary Gensler’s tenure as Chair. According to Cornerstone Research, only 33 actions were initiated in Gensler’s last year, down from 47 the previous year, which had marked the peak of enforcement.
In total, the SEC charged 90 defendants in crypto-related enforcement actions during 2024, including 57 individuals and 33 firms. There was a notable decrease in administrative proceedings, which fell by more than 50% compared to the previous year. Despite the drop in actions, monetary penalties reached a record high of nearly $5 billion.
SEC Hits Record $5B in Crypto Penalties
The SEC’s enforcement actions in 2024 resulted in a record high of nearly $5 billion in penalties, including the $4.5 billion settlement with Terraform Labs. Fraud was the most common allegation, appearing in 73% of cases, while charges of unregistered securities offerings followed at 58%. Market manipulation and failures to register as broker-dealers also saw a rise.
Under Gensler’s leadership, the SEC initiated almost 80% more crypto-related actions than during Jay Clayton’s tenure, from 2017 to 2020. A substantial portion of these cases (47%) involved initial coin offerings (ICOs) and non-fungible tokens (NFTs), reflecting the ongoing regulatory challenges.
Cornerstone reported that more than half of the SEC’s enforcement actions in 2024 occurred in September and October, with only four initiated after November’s US elections. The analysis revealed that fraud and unregistered securities were the most common allegations in crypto-related cases, accounting for 73% and 58%, respectively. It also noted a rise in charges related to market manipulation and failure to register as a broker-dealer.
Regulatory Changes Impacting the Crypto Industry
With Gensler’s departure on January 20, the SEC has begun shifting its priorities under acting chair Mark Uyeda, a Trump appointee. On January 23, the SEC repealed Staff Accounting Bulletin 121, a controversial rule that required banks and financial firms to treat cryptocurrencies as liabilities on their balance sheets.
This change is an early indication of the new administration’s regulatory approach. Some experts have expressed concern about Uyeda’s past suggestions that companies could bypass established SEC rules, potentially creating uncertainty in the regulatory environment.
While the shift in priorities may benefit some crypto firms, others, such as Boston Common Asset Management’s Lauren Compere, have raised concerns about the implications of loosening regulations. Compare cautioned that the SEC’s changing stance could allow companies to sidestep important regulatory processes, potentially destabilizing the market.
Uyeda will serve as the SEC’s temporary head while Paul Atkins, President Trump’s nominee, awaits Senate confirmation. Atkins’ confirmation is expected to take several months, and his position could further shape the future direction of SEC policies toward the cryptocurrency sector.
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