Originally published on: October 13, 2024
In a surprising turn of events, United States regulators have netted a whopping $19 billion in settlement funds from cryptocurrency companies in 2024, marking a significant milestone in the financial landscape. This amount comprises nearly two-thirds of all settlements recorded to date.
A recent report from CoinGecko highlights that the bankrupt crypto exchange FTX and its affiliated trading firm Alameda account for a substantial portion of these funds. In a landmark settlement with the Commodity and Futures Trading Commission (CFTC) in August, these entities paid a staggering $12.7 billion, emphasizing the magnitude of the regulatory crackdown on the crypto industry.
The data reveals that across eight settlements this year, regulators have seen a substantial 78% increase in settlement values compared to 2023. Furthermore, the surge in settlement amounts in 2024 represents a remarkable 8,327% uptick from figures reported in 2022.
The unprecedented rise in settlements with regulators over the past two years indicates a shifting tide in the crypto sector. Analysts point to pivotal events like the collapse of Celsius and Terraform Labs in mid-2022 as key turning points that triggered heightened regulatory scrutiny in the US, leading to subsequent settlements such as the one with FTX.
Terraform Labs emerged with the second-highest settlement of $4.47 billion with the Securities and Exchange Commission (SEC) for the TerraUSD (UST) incident in 2022, while Genesis secured the third spot with a $2 billion settlement with the Office of the Attorney General (OAG) in August 2024.
As we approach the end of the year, experts predict that more settlements between US regulators and crypto companies could be on the horizon. With regulators showing no signs of easing their scrutiny on the industry, 2024 might witness a surge in lawsuit settlements compared to previous years.
Notably, Binance’s settlement in 2023 stands out as a significant win for US regulators as it remains the only billion-dollar settlement awarded to an operating crypto company to date. The resolve shown by regulators in holding companies accountable for their actions underscores a new era of compliance and transparency in the crypto space.
In the midst of this evolving regulatory landscape, it is essential for crypto companies to remain abreast of the latest laws and guidelines to navigate their ventures effectively. Stay informed with our Law Decoded newsletter to make informed decisions for your crypto endeavors. Subscribe now to receive exclusive insights every Monday.
