The SEC issued $4.68 billion fines, an increase of 3018% from last year.
According to a report published today by Social Capital Markets, the US Securities and Exchange Commission (SEC) levied more than $7.42 billion in fines against crypto firms and individuals since 2013.
SEC charged firms like Terraform Labs and Telegram for unregistered token sales and securities violations
In 2019, the commission also fined Telegram and its subsidiary The Open Network (TON) $1.2 billion for the same reasons, increasing the average penalty by nearly 2000% from the previous year.
The penalty imposed against Do Kwon’s Terraform Labs this year eclipsed the $4.3 billion agreement between the US Justice Department, crypto exchange Binance, and its founder, Changpeng Zhao last year.
In 2013, the SEC imposed $40.7 million in fines, marking one of the early regulatory actions in crypto. The penalties then accelerated from 2018 ($3.39 million).
SEC policy
Several crypto businesses, such as Coinbase and Ripple, also face legal cases with the SEC. According to Politico, crypto supporters do not like the commission’s approach.
“The SEC has a mandate to regulate securities — not technology,” says Joe Lubin, co-founder and CEO of crypto firm Consensys Software.
A 2023 King & Spalding document reported that critics accused the commission of regulating by enforcement. They stated that it “punishes digital asset firms for not abiding by laws when the firms don’t know it’ll apply to them.”
However, Gensler said in a testimony that most digital assets are securities, meaning they have to register with the SEC.
He added that crypto exchanges offer many services and mixing them causes conflict of interest and risks.
“Crypto investors should benefit from compliance with the same laws that were laid out to protect against fraud, manipulation, front-running, wash sales, and other misconduct” Gensler said.
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