The SEC’s enforcement actions in the digital asset space have resulted in billions in settlements, with the majority occurring this year. Since extending its oversight to the crypto industry in 2013, the U.S. Securities and Exchange Commission has levied civil penalties against crypto firms totaling over $7.42 billion. According to a study, 68% of these penalties, worth $4.68 billion, were issued to crypto businesses in 2024 as the agency intensified its crackdown on Web3.

The SEC and Terraform Labs, led by Do Kwon, reached a record $4.68 billion settlement, surpassing the $4.3 billion agreement between the U.S. Justice Department, crypto exchange Binance, and its founder, Changpeng Zhao, in 2023. While the SEC has pursued 11 cases this year, 2023 was the most active period for crypto-related enforcement actions, with the agency filing 30 lawsuits against Web3 service providers and securing $150 million in settlements.

The SEC’s crackdown on cryptocurrency businesses has accelerated since 2018, marking the first time penalties issued to digital asset firms entered double digits. By 2019, the average annual fine against crypto businesses skyrocketed by 2000%, primarily due to a $1.2 billion civil penalty imposed on Pavel Durov’s Telegram Group Inc. and its subsidiary, The Open Network (TON) Issuer.

This pattern of lawsuits confirms that the SEC’s “regulation by enforcement” approach pre-dates Gary Gensler’s appointment as chair. Gensler has been a prominent figure in the regulatory landscape, with many in the Web3 community viewing him as an adversary. At a recent Bitcoin event, attendees strongly supported former President Donald Trump’s promise to fire Gensler if re-elected.

As of now, Gensler remains SEC chair, and the agency continues its broad crypto crackdown, known as “Operation Choke Point 2.0.” Several crypto businesses, including Coinbase and Ripple, are in legal battles with the SEC. Gensler has stated that most digital assets are securities and, therefore, non-compliant with federal laws.

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