SEC's crypto industry fines surpass $7.4 billion after massive Terraform penalty: study

Since 2013, the crypto industry has been fined a total of $7.4 billion, according to a new study published Tuesday by digital assets analytics firm Social Capital Markets.

With Terraform Labs agreeing to pay $4.47 billion earlier this year, 2024 has already surpassed all previous years with a fine total of $4.7 billion, the report said. However, the total number of fines issued dropped to 11 from 30 last year, when the SEC fined the crypto industry a total of $150 million, also according to the report.

"The overall increase in fine amounts indicates a strategic shift toward fewer, high-impact cases," Social Capital Markets said in its report. "This evolution emphasizes the need for crypto firms to prioritize regulatory compliance as the financial risks associated with violations have escalated."

The SEC has issued a total of 148 fines since 2013, according to Social Capital Markets' calculation. Of those, 63 fines were levied against firms and individuals, the study said. The firm's $7.4 billion estimate includes both crypto firms and individuals. 

SEC fines since 2013. Image: Social Capital Markets

Behind the massive Terraform Labs fine, the SEC's $1.2 billion fining of Telegram ranked second of all time in terms of total size. In 2020, Telegram agreed to pay a fine and return $1.2 billion to investors as punishment for initiating an "unregistered digital token sale through its TON blockchain project," the report said.