The SEC Achieves $8.2 Billion in Financial Remedies in 2024 Despite Decrease in Enforcement Actions

The US Securities and Exchange Commission (SEC) reached a significant milestone in its 2024 fiscal year, securing $8.2 billion in financial remedies despite a decrease in enforcement actions.

Although the agency filed 583 cases this year, a 26% decrease from the previous year, substantial financial penalties from high-profile cases such as Terraform drove remedies to record levels.

Terraform Labs: A Major Contributor to SEC’s Enforcement Penalties

The SEC’s enforcement report highlighted Terraform Labs as a major contributor, responsible for 56% of the year’s total financial remedies. The $4.5 billion penalty imposed on Terraform Labs stemmed from the 2022 Terra/Luna collapse, resulting in the largest monetary judgment ever secured by the SEC after a trial.

Following the collapse, Terraform Labs and its CEO, Do Kwon, were found guilty of defrauding investors, marking one of the most significant securities fraud cases in the SEC’s history. The incident, which had far-reaching implications on the crypto market, led to substantial losses for investors and increased regulatory scrutiny.

In addition to the Terraform case, the SEC also reached settlements with entities like Silvergate Capital and BarnBridge DAO for misleading disclosures and failure to register structured crypto assets as securities, respectively.

Aside from enforcement actions, the SEC emphasized its commitment to investor protection by distributing $345 million to harmed investors this year, bringing the total to over $2.7 billion since 2021.

Moreover, the agency processed 45,130 tips, complaints, and referrals in 2024, including 24,000 whistleblower submissions. Whistleblower awards amounted to $255 million, showcasing the SEC’s reliance on public collaboration to identify and address financial wrongdoing.

Outgoing SEC Chair Gary Gensler reiterated the agency’s dedication to safeguarding investors, stating, “The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable.”

Despite the SEC’s accomplishments, critics like Miles Jennings, head of decentralization at a16z crypto, have raised concerns about the agency’s enforcement strategy. Jennings argued that while large financial penalties serve as visible deterrents, they may not address underlying systemic issues in financial markets.