As a seasoned crypto investor who has witnessed the meteoric rise and fall of various digital assets, I must admit that the recent regulatory crackdown is making me feel like a gold miner during the California Gold Rush – only instead of gold, it’s regulatory compliance.
The cryptocurrency companies FTX and Alameda, affiliated firms, encountered the most substantial crypto-related fines imposed by U.S. regulatory bodies, totaling an astounding $12.7 billion in penalties collectively.
As a crypto investor, I’ve noticed that the fine levied on a certain crypto company leads the pack in penalties, underscoring the growing scrutiny of the now-defunct exchange by regulators. Interestingly, Binance‘s $4 billion settlement stands out as the largest penalty ever imposed on an active cryptocurrency company, yet it ranks fourth in terms of overall size.
Heightened Crackdown Post FTX
According to a recent report by the data collector for cryptocurrencies, it has been found that 25 enforcement actions taken against U.S. cryptos have resulted in settlements over $10 million each, totaling approximately $32 billion in penalties. This suggests an increasing clampdown on the crypto industry.
16 out of the 25 most significant crypto enforcement actions in the U.S. have been concluded over the past two years, showing a clear increase in regulatory scrutiny since the high-profile collapse of FTX, orchestrated by disgraced executive Sam Bankman-Fried (SBF), towards the end of 2022. This suggests that authorities are ramping up their supervision due to such events.
In the year 2023, it appears that US regulatory bodies settled eight significant lawsuits, accumulating a total of $10,870,000,000 in settlements – a record-breaking figure and an incredible 8,327.1% jump compared to the previous year’s amount.
Several Victories for US Regulators
Between 2019 and 2022, I’ve been witnessing an interesting development in the crypto sphere: US regulators managed to secure eight substantial settlements in major cryptocurrency lawsuits. The journey began towards the end of 2019 when the Securities and Exchange Commission (SEC) struck a $24 million deal with Block.one, the firm behind EOS, for selling unregistered securities.
In 2020, the Securities and Exchange Commission (SEC) added two more victories to its record: BitClave consented to pay a sum of $29.34 million in May, while Telegram was penalized a whopping $1.24 billion due to its Gram token offering. This fine included a disgorgement amounting to $1.22 billion and an additional civil penalty of $18.5 million.
2021 witnessed three significant regulatory settlements in the bull market, led by Tether, a stablecoin issuer. Firstly, they agreed to pay $18.5 million to the New York Attorney General. Later, they reached an accord worth $41 million with the CFTC over allegations concerning the backing of their USDT stablecoin with U.S. dollars.
In addition to fining Tether’s parent company, Bitfinex, a sum of $1.5 million due to unlawful transactions, both crypto exchanges Poloniex and BitMEX reached settlements for their respective lawsuits. The former agreed to pay $10.39 million in August 2021, while the latter had to pay a much larger amount of $100 million during the same month.
In 2022, cryptocurrency lender BlockFi and exchange Bittrex each paid fines totaling $100 million (BlockFi) and $29 million (Bittrex), to the Securities and Exchange Commission (SEC) and the U.S. Treasury Department, respectively.
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2024-10-14 00:24