The Securities and Exchange Commission (SEC) recorded an all-time high of $8.2 billion in financial remedies for the 2024 fiscal year. The figure is noticeably higher than the $4.9 billion it recouped in 2023, signaling a 67% increase.
According to its statement, the SEC filed 583 enforcement actions in the fiscal year 2024, a drop of 23% from last year. The statement revealed that 431 enforcement actions were served individually, while 43 were follow-up actions including orders, criminal prosecution, and others. The agency filed 59 enforcement actions against issuers late with their filings.
Despite the drop in enforcement actions, the agency was able to recoup a large sum in penalties because of its Terraform Labs prosecution. In the case, the company was ordered to pay $4.5 billion, while its CEO Do Kwon was asked to pay $200 million. Giving his verdict on the report, SEC Chairman Gary Gensler highlighted the agency’s proactive approach as a tool that helped its cause.
SEC sees record-breaking 2024 fiscal year
SEC Chairman Gary Gensler was full of praise for the agency’s enforcement division, calling them steadfast servants. “The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable. As demonstrated by this year’s results, the Division helps promote the integrity of our capital markets to benefit investors and issuers alike,” Gensler said.
Aside from its financial returns, the SEC also saw an increase in reports and complaints. The agency recorded more than 45,000 tips, complaints, and referrals. The agency also secured orders to ban 124 individuals from several positions in publicly listed companies. The agency also secured returns of $345 million on behalf of affected individuals.
The report revealed that the SEC handled four major cases, with two being crypto-related. One of the cases was the HyperFund pyramid scheme where investors were swindled by about $1.7 billion worldwide. The report noted that the SEC has charged the involved parties. The agency also went after NovaTech and its founders for a crypto scheme that scammed investors of about $650 million.
Aside from the two cases, the report revealed that bad actors were taking advantage of emerging technologies to carry out their evil acts. It said artificial intelligence technology is now deployed to scam unsuspecting traders. The agency noted that it was able to settle charges against Barnbridge DAO and Silvergate Bank.
Terraform Labs’ $4.5 billion is still in the wind
Despite the regulator already awarded $4.5 billion in its lawsuit with Terraform Labs, there are still lingering questions surrounding its payment. One reason is that the firm is in bankruptcy, and has the court’s green light to wind down. Aside from that, the company is likely not going to pay the investors it owes, talking less of the SEC’s penalty. However, it has the SEC’s permission to pay after satisfying all investors’ claims.
Terra has shut down its services, including its Shuttle Bridge Interface which was closed in early November. The company has burned all the tokens in the wallet, with plans to close Enterprise DAO, Warp Protocol, and some other platforms by December 31. Meanwhile, investors are still hopeful that the community can drive a revival. The Luna Classic community on Discord recently approved the transfer of Coinmarketcap dashboard account access to top validator Allnodes.