Crypto Firms Pay $32 Billion in Settlements as Enforcement Actions Intensify

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.