Regulators Seek to Maintain Oversight as Cryptocurrency Market Continues to Grow
U.S. regulators have levied a staggering $32 billion in penalties against cryptocurrency companies to settle compliance disputes. The largest sum, amounting to $19.45 billion, was collected in 2024, with the bulk of it coming from FTX and Alameda Research, who were jointly ordered to pay $8.7 billion in restitution and a $4 billion fee for their wrongful gains.
Terraform Labs, on the other hand, paid $4.5 billion in 2024, including interest and a $420 million fine. The founder, Do Kwon, will also pay a substantial sum in interest, fines, and compensation, with a portion of it going to the bankruptcy estate for distribution to investors.
Other significant fines include Binance’s $4.3 billion and Celsius’s $4.7 billion in 2023. Binance was fined $1.81 billion in a criminal case and ordered to pay $2.51 billion in compensation, while Celsius was prohibited from promoting any product or service related to assets.
The string of enforcement actions began with FTX’s collapse in 2022, followed by Celsius’s bankruptcy, and culminated in FTX’s collapse in November 2022. Despite the upheaval, Binance remains the largest operational centralized exchange by trading volume.
In 2023, U.S. government agencies reached settlements totaling $10.87 billion in eight cases, marking a significant increase in recovery amounts. In 2024, another eight settlements were reached for $19.45 billion, indicating a 78.9% increase from the previous year.
In the years leading up to this, American regulators made headway in major cryptocurrency litigation, with significant settlements with Block.one, BitClave, Telegram, and Tether, among others. However, the actual amount of fines and other payments imposed on top managers by the CFTC may be even higher, indicating that regulators have collected several billion dollars more than the reported $32 billion in penalties.
