Record Fines and Crypto Industry Crackdown | Airdrop Alert Pro

The SEC remains public enemy No. 1 of the U.S. cryptocurrency industry and will increase enforcement efforts in 2024. The regulatory body Cryptocurrency Company annual.

As Donald Trump’s incoming administration anticipates possible changes in the SEC’s regulatory stance, here’s a look back at how the agency has scrutinized cryptocurrency companies this year.

Record-breaking fine highlights SEC stance on cryptocurrencies

This year has been a turning point in the regulator’s approach, with fewer enforcement actions but a sharp increase in fines. In 2024, SEC collects $8.2 billion punishment 583 Cryptocurrency Companies.

This number is greater than the cumulative fines levied over the past 12 years. Most surprising is that this sharp increase came from just 11 cases, each involving significant financial misconduct.

One of the most important cases relates to Terraform Labs. Its founder, Du Quanfacing charges of orchestrating one of The largest securities fraud case in American history. After a Manhattan jury trial, Terraform Labs settles with SEC for $4.5 billion.

“Terraform Labs PTE, Ltd. and Do Kwon agree to pay more than $4.5 billion after a jury unanimously found them guilty of orchestrating a years-long fraud involving crypto-asset securities that resulted in substantial losses for investors when it was uncovered ,” U.S. Securities and Exchange Commission (SEC) release Come back in June.

Terraform, which filed for bankruptcy in January, will be prioritized Compensating Cryptocurrency Investors During the liquidation process prior to the performance of the SEC Settlement Agreement.

The company estimates that eligible stakeholders could receive between $184.5 million and $442.2 million in damages, with the majority of the settlement amount yet to be paid.

Fraud cases dominate SEC enforcement actions

The U.S. Securities and Exchange Commission (SEC) has pursued multiple fraud cases, most notably involving Touzi Capital and its founder Eng Taing. Investment Capital has raised over $100 million from investors promising safe, high-yielding cryptocurrency mining projects and debt repair projects.

However, SEC alleges misuse of funds and switching to unrelated industries for personal gain.

According to the complaint, the company Bitcoin mining business Contrary to its marketing claims of reliability and profitability, the company was plagued by fluctuating energy costs and equipment problems. As a result, the SEC seeks a permanent injunction, civil penalties, and a ban on Taing from serving as an officer or director of any company.

Another notable development involves BitClave, a blockchain startup accused of violating securities laws during its 2017 founding. Initial Coin Offering. Distributed by the U.S. Securities and Exchange Commission BitClave Fair Fund provides $4.6 million to investors.

The fund compensates those affected by the collapse of the company’s Consumer Activity Token (CAT) issuance.

Cryptocurrency companies fight back against SEC lawsuit

Some SEC lawsuits help combat scammers and fraud. However, cryptocurrency industry leaders dislike a regulatory approach that lacks clarity and enforcement. For example, the U.S. Securities and Exchange Commission has taken legal action against various cryptocurrency exchanges for classifying cryptocurrency trading as securities.

The SEC’s lawsuits and enforcement actions have sparked a backlash from major players in the cryptocurrency industry. Crypto.com, after Received notification from Wells in Octoberpreemptively sued the agency.

The company’s CEO Kris Marszalek criticized the regulator’s stance, saying it was unfair to classify most crypto transactions as securities. This has been an ongoing trend at the agency under the leadership of Gary Gensler.

However, Crypto.com withdrew its lawsuit in early December Marsalek meets President-elect Donald Trump. The industry seems hopeful about a potential shift in the SEC’s cryptocurrency case under Paul Atkins’ new leadership.

“Despite the looming change of administration, the SEC is still issuing notices to Wells. However, Crypto​.com is so confident that the SEC will be stymied by the new administration that they are withdrawing their case against the agency — right now The same day their CEO met with Trump,” cryptocurrency researcher Molly White Wrote on X (formerly Twitter).

At the same time, Binance and its former CEO Changpeng Zhao also tried to challenge the SEC’s enforcement methods. Their legal team filed a motion to dismiss the amended complaint, arguing SEC fails to provide clear standards Used to determine when a crypto transaction qualifies as a security.

The defense pointed to inconsistencies with previous rulings, including the high-profile SEC vs. Ripple casethe conclusion is that XRP is not Safety in all scenarios.

Similarly, Kraken disputes SEC claims Certain digital assets such as ADA and Solconsistent with the definition of securities. Quote Howie testKraken argued that the assets did not qualify as investment contracts and accused the SEC of regulatory overreach.

“Gensler’s policy is one extreme, but the remaining question is whether we will move to the other extreme. I think progress has been made in promoting the SEC’s neutral stance and regulation/adoption.” Sander Gortjes, co-founder of HELLO Labs Tell BeInCrypto

Legal and financial implications of DeFi protocols

The SEC also targets decentralized finance (Decentralized Finance) agreement, with Rari Capital faces accusations of misleading investors Operating unregistered investment products.

At its peak, Rari managed over $1 billion in crypto assets through its yield pools and circuit breaker pools, promising automatic rebalancing for optimal returns.

However, the SEC claims these processes often require manual intervention, contradicting the company’s claims.

SEC efforts extended to individual promoters, including Vy Pham, who was charged with illegally selling unregistered securities Promotion of Saitama Inu Token. Pham allegedly misled investors by exaggerating the value and potential returns of the tokens and profited at the expense of investors.

In addition to enforcement actions, the SEC has also found itself embroiled in legal proceedings brought by cryptocurrency companies. Bitnomial is a derivatives exchange headquartered in Chicago. File a lawsuit against the SEC. The exchange argued that its XRP futures The contract falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

Landmark win over Coinbase

Earlier this year, the U.S. Securities and Exchange Commission (SEC) issued a ruling allowing it Lawsuit against Coinbase The trial continues. The case centers on accusations that the exchange engaged in unregistered securities sales.

U.S. District Judge Katherine Polk Failla rule The transactions in question fall within a framework that courts have used for decades to identify securities, bolstering the SEC’s authority over crypto platforms.

The outcome of the trial could have far-reaching consequences for the industry as it tests the limits of the SEC’s regulatory powers and the legal classification of digital assets.

this SEC Actions in 2024 Reflecting the intensified crackdown on the cryptocurrency industry. However, under the new pro-cryptocurrency administration, industry and community members expect the agency’s stance to change significantly.

“Gary Gensler did not originate the US SEC’s crackdown on cryptocurrencies. However, his enforcement actions go beyond those of his predecessors. As pro-crypto SEC Chairman, Paul Atkins is expected to lead in a different way , demonstrating collaboration with cryptocurrencies and the broader financial ecosystem,” said WeFi co-founder Maksym Sakharov.

Major cryptocurrencies such as XRP have rallied based on this optimism. However, the true scope of these changes will only be realized in the coming months.