SEC Reports $8.2 Billion in Enforcement Income for 2023-24

TLDR

• SEC reported record $8.2 billion enforcement income for 2023-24 fiscal year
• Digital asset cases accounted for approximately half of total enforcement income
• Terraform Labs settlement of $4.5 billion was the largest single contributor
• Gary Gensler announced stepping down as SEC Chair in January
• Cryptocurrency enforcement actions remained a major focus for the agency

The Securities and Exchange Commission (SEC) has announced a record-breaking $8.2 billion in enforcement income for the 2023-24 fiscal year, with cryptocurrency-related cases emerging as the primary driver of this unprecedented figure.

The agency’s annual enforcement report, released today, reveals that digital asset cases contributed approximately half of the total enforcement income. This marks the highest amount ever collected by the SEC through enforcement actions in a single fiscal year.

At the center of this record-breaking sum stands the $4.5 billion settlement with Terraform Labs, representing more than half of the total enforcement income. This single case became the largest cryptocurrency-related settlement in SEC history, stemming from charges related to the collapse of the Terra/LUNA ecosystem.

The timing of this announcement carries additional weight as it coincides with SEC Chair Gary Gensler’s recent announcement of his planned departure in January. This enforcement report will serve as one of the final major milestones of his tenure at the helm of the regulatory agency.

In describing the year’s enforcement activities, the SEC highlighted its continued focus on cryptocurrency-related violations. The agency pursued cases involving unregistered securities offerings, fraudulent investment schemes, and violations of federal securities laws within the digital asset space.

The enforcement division maintained an aggressive stance toward crypto-related violations throughout the year. Cases ranged from actions against major cryptocurrency exchanges to investigations of individual token offerings and decentralized finance (DeFi) projects.

Beyond the Terraform Labs settlement, the SEC secured numerous other notable enforcement actions in the cryptocurrency sector. These included cases against various crypto lending platforms, token issuers, and cryptocurrency exchanges operating within U.S. jurisdiction.

The report details how the agency allocated its enforcement resources, with a substantial portion directed toward investigating and prosecuting cases involving digital assets. This focus reflects the SEC’s stated commitment to protecting investors in the rapidly evolving cryptocurrency market.

The enforcement division’s actions extended beyond purely punitive measures. The agency reports that it secured various forms of relief, including civil penalties, disgorgement of ill-gotten gains, and prejudgment interest from violators.

Throughout the fiscal year, the SEC maintained its position that many cryptocurrency tokens qualify as securities under existing federal laws. This interpretation formed the basis for numerous enforcement actions against crypto projects and platforms.

The agency’s enforcement strategy included a combination of individual and institutional actions. Cases targeted both small-scale fraudulent schemes and large-scale violations by established market participants.

The report indicates that the SEC’s enforcement division conducted hundreds of investigations throughout the year, with digital asset-related cases representing a substantial portion of their workload.

The document also reveals that the agency continued to receive thousands of tips and complaints related to cryptocurrency investments, highlighting the ongoing challenges in this sector.

Looking at the breakdown of cases, the report shows that enforcement actions addressed various types of violations, including registration violations, fraud, market manipulation, and disclosure failures.

Enforcement staff utilized various investigative techniques and technologies to identify and pursue violations in the cryptocurrency space, including blockchain analysis tools and traditional financial investigation methods.