The SEC is the largest collector of crypto fines in the US
Since Satoshi Nakamoto developed Bitcoin, crypto companies have paid over $3 billion in penalties to US authorities.
The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) receive the majority of the penalties paid by cryptocurrency companies. Since the industry’s inception in 2009, companies have spent more than $3 billion.
A recent analysis from Elliptic, a blockchain analytics company, reveals that US financial authorities had fined cryptocurrency sector businesses $3.3 billion. In 2020, the sum was just $2 billion, but 18 months later, as a result of stronger regulatory efforts to rein in the market, it almost quadrupled.
The study revealed that 70 percent of all penalties were paid to the SEC, making it the biggest enforcement agency. BlockFi was notoriously fined $100 million by the SEC for failing to register their loan product.
Gary Gensler, chairman of the Securities and Exchange Commission, said that the decision “demonstrates the Commission’s readiness to engage with crypto platforms to establish how they might comply” with current rules. The SEC fined Telegram $18.5 million in 2020 and demanded the refund of $1.2 billion to investors for an unregistered issuance of digital tokens.
By announcing the desire to expand the size of the Crypto Assets and Cyber Unit, the Commission chaired by Gary Gensler alludes to additional efforts to regulate the cryptocurrency business.
Since 2009, the CFTC has levied nearly $500 million in penalties against crypto companies, following the SEC’s lead. BitMEX was fined $100 million for breaches of the Bank Secrecy Act (BSA) by the Financial Crimes Enforcement Network (FinCEN), while the Office of Foreign Assets Control has began leaving its mark on the market with penalties of roughly $1 million.
Unregistered securities offers, fraud, and anti-money laundering offences account for the majority of penalties. Civil penalties, disgorgements, and restitutions are common types of sanctions, with Steve Chen’s 2017 settlement for fraud charges exceeding $217 million.