The U.S. Securities and Exchange Commission’s (SEC) enforcement actions related to cryptocurrency fell by 30% in the final year under former Chair Gary Gensler, according to a new report. The SEC initiated just 33 crypto-related actions during Gensler’s last year, compared to 47 actions in the prior year, which marked the agency’s peak enforcement period, Cornerstone Research stated in a report released on Jan. 23.
The total number of defendants or respondents in crypto-related enforcement actions last year stood at 90, including 57 individuals and 33 firms. Additionally, administrative proceedings saw a sharp decline, dropping by more than 50%. Monetary penalties imposed on crypto participants hit a record $5 billion in 2024, largely due to the SEC’s $4.5 billion settlement with Terraform Labs.
Gensler, appointed by President Joe Biden in 2021, stepped down as SEC chair on Jan. 20, with Donald Trump taking office and appointing Mark Uyeda as acting SEC chair. Cornerstone Research noted that more than half of the SEC’s crypto-related enforcement actions in 2024 occurred in September and October, with only four cases initiated after the November U.S. elections.
Fraud remained the SEC’s most common allegation, featuring in 73% of cases, followed by accusations of unregistered securities offerings, cited in 58% of actions. The regulator also ramped up charges focusing on market manipulation and failures to register as broker-dealers. Under Gensler’s leadership, the SEC initiated nearly 80% more crypto-related enforcement actions than during Jay Clayton’s tenure from 2017 to 2020.
Since 2013, the SEC has brought 207 crypto enforcement actions, with nearly 47% related to initial coin offerings (ICOs) and non-fungible tokens (NFTs). Mark Uyeda, Trump’s acting chair for the SEC, has already initiated changes in the regulator’s approach to crypto. On Jan. 23, the SEC revoked Staff Accounting Bulletin 121, a rule that required banks and financial firms holding cryptocurrencies to record them as liabilities on their balance sheets.
Conclusion
The decline in crypto-related enforcement actions during Gensler’s final year suggests a potential shift in the SEC’s priorities and strategy regarding digital assets. While Gensler’s tenure marked an aggressive stance on crypto regulation, the early decisions under acting chair Mark Uyeda hint at a more pragmatic approach. With record-breaking penalties and evolving allegations, the SEC’s enforcement trends reflect the complexities of regulating the growing cryptocurrency industry.
FAQs
Why did the SEC’s crypto actions drop under Gensler’s leadership?
The decline may indicate a shift in enforcement priorities or resource allocation. However, Cornerstone Research suggests that the high volume of actions in earlier months and election-related factors contributed to the decrease.
What was the largest penalty imposed by the SEC in 2024?
The SEC imposed a $4.5 billion settlement on Terraform Labs, contributing to record-breaking penalties of nearly $5 billion in 2024.
How does the SEC’s enforcement under Gensler compare to previous chairs?
Gensler’s SEC initiated nearly 80% more crypto-related enforcement actions than Jay Clayton’s tenure, emphasizing the agency’s heightened focus on cryptocurrency regulation.
What changes has Mark Uyeda made since taking over as acting chair?
Uyeda has already rescinded Staff Accounting Bulletin 121, which required financial firms holding cryptocurrencies to classify them as liabilities. This move signals a potential shift in the SEC’s regulatory approach.
What are the most common allegations in SEC crypto cases?
Fraud and unregistered securities offerings are the most common allegations, with fraud cited in 73% of cases and unregistered securities offerings in 58%.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
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