The battle between US regulators and crypto companies has intensified, with nearly $32 billion collected in settlements since 2019, according to a report by CoinGecko. The most significant regulatory action to date has been against the now-defunct crypto exchange FTX and its trading firm affiliate, Alameda.

The Commodity and Futures Trading Commission (CFTC) imposed a combined $12.7 billion in penalties on these companies, a settlement announced in August 2024, nearly two years after FTX’s collapse.

FTX and Binance

Binance, however, stands out as the largest operational company to face such a steep penalty. In November 2023, the leading crypto exchange agreed to pay $4.3 billion to settle with several US regulatory bodies, including the Department of Justice and the Treasury Department.

FTX’s implosion in late 2022 catalyzed a wave of heightened scrutiny on the crypto industry. In 2023 alone, US regulators secured $10.87 billion in settlements, a staggering 8,327% increase from the previous year. But 2024 saw even more aggressive action, with eight major lawsuits settled, totaling $19.45 billion by October.

Another high-profile case was Celsius's collapse, which led to a $4.7 billion settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term. During the same period, Terraform Labs fell and faced $4.5 billion in penalties.

Crypto Regulations

While the spotlight has been on recent enforcement actions, regulators began targeting the crypto space well before the FTX collapse. In 2019, Block.one (now B1), the company behind the EOS token, was fined $24 million by the SEC for selling unregistered securities.

A year later, the SEC secured a $1.24 billion settlement from Telegram over its Gram token offering, a case that reverberated throughout the crypto world. Amid the bull market of 2021, Tether, one of the industry’s most prominent stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term issuers, settled for $18.5 million with the New York Attorney General.

The CFTC also took action against Tether’s parent company, Bitfinex, for illegal transactions, though that settlement was significantly smaller at $1.5 million.The Department of Justice and the Treasury Department have played increasingly prominent roles, targeting not just defunct firms like FTX but also current industry giants like Binance.

As of October 2024, there have been 25 enforcement actions with settlements exceeding $10 million, contributing to the nearly $32 billion total.