Global: SEC’s Crypto Enforcement Actions Decline by 30% in Gensler’s Final Year

Crypto enforcement actions by the U.S. Securities and Exchange Commission (SEC) dropped significantly during the last year of Gary Gensler’s tenure as Chair, according to a report by Cornerstone Research. The SEC initiated 33 crypto-related actions in 2024, marking a 30% decline from the 47 actions launched during its peak enforcement year in 2023.

Key Trends in SEC Enforcement

The report revealed that the SEC charged 90 defendants or respondents in 2024, consisting of 57 individuals and 33 firms. However, administrative proceedings saw a substantial decrease, falling by over 50% compared to the previous year. Despite fewer actions, monetary penalties in the crypto sector hit a record high of nearly $5 billion, primarily due to a $4.5 billion settlement with Terraform Labs.

Enforcement Priorities Under Gensler

Fraud remained the SEC’s most frequent allegation, appearing in 73% of its crypto-related cases, followed by accusations of unregistered securities offerings at 58%. The agency also focused on charges related to market manipulation and failures to register as broker-dealers.
Since 2013, nearly half (47%) of the SEC’s 207 crypto enforcement actions have targeted initial coin offerings (ICOs) and non-fungible tokens (NFTs).

Post-Election Shift in Focus

A notable trend in 2024 was the clustering of enforcement actions, with over half initiated in September and October. After the U.S. elections in November, only four actions were launched, signaling a shift in priorities.

Following Gensler’s resignation on January 20, 2024, and the appointment of acting Chair Mark Uyeda under the Trump administration, the SEC has already begun recalibrating its regulatory approach. One of Uyeda’s first actions was the cancellation of Staff Accounting Bulletin 121, a controversial rule requiring banks and financial institutions holding crypto to record these assets as liabilities on their balance sheets.

Implications for Regulatory Compliance

This reduction in enforcement actions does not diminish the importance of robust compliance frameworks for crypto industry participants. The SEC’s record-high monetary penalties underscore the regulator’s commitment to addressing fraud and unregistered securities in the evolving digital asset landscape.

Conclusion

The shift in SEC priorities under new leadership marks a critical juncture for the crypto sector. As regulatory dynamics evolve, industry participants must stay vigilant, prioritize compliance, and anticipate the implications of these changes on broader market operations.