Enforcement during Gensler administration was considerably higher than during the previous administration
WASHINGTON, Jan. 23, 2025 /PRNewswire-PRWeb/ -- The Securities and Exchange Commission (SEC) brought 33 cryptocurrency-related enforcement actions in 2024, the last year of the Chair Gary Gensler's administration, according to a Cornerstone Research report released today. This number is 30% lower than the high reached in 2023 and marks the first year-over-year decline since 2021.
The report, SEC Cryptocurrency Enforcement: 2024 Update, found that, of the 33 enforcement actions, half were brought in September and October, ahead of the presidential election in early November. The SEC brought 25 litigations in U.S. district courts and eight administrative proceedings in 2024. Compared to 2023, the number of litigations slightly decreased, while administrative proceedings declined by more than 50%. Monetary penalties imposed reached a record high of $4.98 billion, largely attributable to one multi-billion-dollar settlement.
"The SEC has continued to focus on its implementation of the Howey test," said Abe Chernin, a Cornerstone Research vice president and cohead of the firm's FinTech practice. "In 2024, the SEC also concentrated on enforcement actions alleging market manipulation or failures to register as a broker-dealer."
The report also compares the Gensler administration to that of Jay Clayton, the SEC chair during the first Trump administration (May 4, 2017–December 23, 2020). Under Chair Gensler (April 17, 2021–December 31, 2024), the SEC initiated 125 cryptocurrency-related enforcement actions, compared to 70 under Chair Clayton. Of those, Chair Gensler resolved 98 while Chair Clayton resolved 50. The Gensler administration imposed $6.05 billion in monetary penalties, nearly four times the $1.52 billion imposed under Chair Clayton.
"Despite the drop in number of enforcement actions in 2024, cryptocurrency remained a top priority during Chair Gensler's final year," said Simona Mola, the report's author and a principal at Cornerstone Research. "Since 2018, cryptocurrency has represented, on average, approximately 6% of the SEC's overall enforcement efforts in terms of actions initiated. We will be watching how enforcement may change in 2025, in light of the SEC's recently announced crypto task force."
The analysis further found that 66% of all enforcement actions brought under Chair Gensler contained allegations of fraud, compared to 54% of actions brought under Chair Clayton. Conversely, 71% of Clayton administration actions contained unregistered securities offering violations, compared to 63% during the Gensler administration.
Additional Highlights
- Of all 2024 cryptocurrency-related SEC actions, 73% alleged fraud, while 58% alleged an unregistered securities offering violation, and 39% alleged both.
- Fourteen actions alleged market manipulation or failure to register as a broker-dealer, an increase compared to prior years.
- Eight enforcement actions were related to initial coin offerings (ICOs), and one was related to nonfungible tokens (NFTs).
- The SEC charged 90 defendants—57 individuals and 33 firms—in 2024 enforcement actions. Approximately 21% of actions were against individuals only, down from 36% in 2023.
- The SEC continued to recognize self-reporting, cooperation, or remedial efforts of five of the nine respondents charged in administrative proceedings. In one administrative proceeding, the SEC imposed no monetary penalties because of remedial efforts and cooperation.
- Since 2013, when the SEC brought its first cryptocurrency-related enforcement action, through 2024, the SEC brought 207 enforcement actions, including 135 litigations and 72 administrative proceedings. Of the 207 actions brought since 2013, 47% have been related to ICOs.
Cornerstone Research's Cryptocurrency Enforcement Database contains cryptocurrency-related enforcement actions brought by the SEC between January 1, 2013, and December 31, 2024.
About Cornerstone Research
Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm works with an extensive network of prominent academics and industry practitioners to identify the best-qualified expert for each assignment. With a reputation for high quality and effectiveness, Cornerstone Research has consistently delivered rigorous, state-of-the-art analysis since 1989. The firm has more than 1,000 professionals in nine offices across the United States, UK, and EU.
Media Contact
Elisabeth Gaubinger, Cornerstone Research, 202.912.8909, [email protected], https://www.cornerstone.com/
SOURCE Cornerstone Research
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