16 Settlements Finalized in Two Years Indicate Heightened Regulatory Focus

FTX and its sister firm Alameda faced the largest crypto-related enforcement by US regulators, with a staggering $12.7 billion in combined settlement charges.

According to CoinGecko’s findings, this amount tops the list of penalties imposed on cryptocurrency companies, highlighting the regulatory focus on the now-bankrupt exchange. Meanwhile, Binance’s $4 billion settlement is notable as the highest-ever penalty against an operational crypto company. However, it ranks only as the fourth-largest overall.

Heightened Crackdown Post FTX

The crypto data aggregator, in its report published earlier this week, revealed that 25 US crypto enforcement actions have resulted in settlements exceeding $10 million each, with total penalties from these cases amounting to nearly $32 billion, signaling a growing crackdown on the industry.

Of the top 25 crypto enforcement actions in the US, 16 settlements have been finalized in the past two years. This was essentially indicative of intensified regulatory oversight following the dramatic collapse of FTX, which was led by disgraced exec Sam Bankman-Fried (SBF) in late 2022.

Data suggests that in 2023 alone, US regulators resolved eight major lawsuits, totaling $10.87 billion in settlement value – a record amount and an astonishing 8,327.1% increase compared to the previous year.

Several Victories for US Regulators

From 2019 to 2022, US regulators secured eight significant settlements in major crypto lawsuits. The first one occurred in late 2019 when the SEC reached a $24 million agreement with Block.one, the company behind EOS, for selling unregistered securities.

In 2020, the SEC won two additional cases: BitClave agreed to pay $29.34 million in May, and Telegram was fined $1.24 billion over its Gram token offering, which included a disgorgement of $1.22 billion and a civil penalty of $18.5 million.

During the 2021 bull market, regulators recorded three notable settlements, starting with stablecoin issuer Tether, which settled with the New York Attorney General for $18.5 million and later reached a $41 million agreement with the CFTC regarding claims of USD backing for its USDT stablecoin.

The CFTC also penalized Tether’s parent company, Bitfinex, with a $1.5 million settlement for illegal transactions. Furthermore, crypto exchanges Poloniex and BitMEX settled their lawsuits for $10.39 million and $100 million, respectively, in August 2021.

Meanwhile, in 2022, crypto lender BlockFi and crypto exchange Bittrex settled for $100 million and $29 million, respectively, with the SEC and the Treasury Department.