Quick Look at the Top 15 Cryptocurrency Enforcement Actions in the United States Binance’s $4.3 billion settlement is only ranked second

Insight into the Top 15 Cryptocurrency Enforcement Actions in the US Binance's $4.3 billion Settlement Comes in Second Place

Original Author | CoinGecko Lim Yu Qian

Translation | Odaily Planet Daily Nian Yin Si Tang

Editor’s Note: CoinGecko recently released a report titled “US Regulators v Crypto: $12.4B in Largest Settlements”, which summarizes the settlement agreements between US regulatory agencies and major crypto companies, listing the top 15 crypto enforcement actions in the country. Odaily Planet Daily has compiled the following translation based on this report:

Top 15 Crypto Enforcement Actions in the US

In crypto litigation initiated by US regulatory agencies, the now bankrupt crypto lending institution Celsius has agreed to pay $4.7 billion, the largest settlement amount to date. Celsius reached a settlement with the Federal Trade Commission (FTC) in July 2023 over allegations of investor protection violations. However, it should be noted that the timing for Celsius to pay the settlement amount has been delayed until after its bankruptcy proceedings.

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The $4.3 billion settlement agreement with Binance makes it the second-largest enforcement action. Nevertheless, for US regulatory agencies, the settlement with Binance is still considered a “milestone victory” because it is the only settlement of several billion dollars paid by an operating cryptocurrency company to date. Binance pled guilty in November 2023 to settle lawsuits brought by multiple US regulatory agencies including the Department of Justice (DOJ), the Treasury Department, and the Commodities Futures Trading Commission (CFTC).

The third-largest crypto enforcement action is against another bankrupt crypto lending institution, Voyager, which reached a $1.65 billion settlement agreement with the FTC in October 2023. Similar to Celsius, Voyager’s settlement payment has also been delayed until after its bankruptcy proceedings.

So far, only 15 crypto litigations initiated by US regulatory agencies have reached settlement agreements exceeding $10 million. In comparison, Violation Tracker data shows that the traditional financial services industry has had 48 settlements exceeding $1 billion in lawsuits.

In the top 15 crypto enforcement actions initiated in the US, violations of investor protection, inadequate anti-money laundering (AML) measures, and violations of economic sanctions are the main types of charges.

When did the major crypto enforcement actions occur in the US?

Of the 15 largest crypto enforcement actions in the US, nearly half, 7 of them, reached settlements in 2023 (accounting for 47% of the total). After the collapse of centralized crypto exchange FTX in November 2022, regulatory scrutiny in the crypto industry has intensified worldwide this year.

It is worth mentioning that the first four major cryptocurrency settlements reached with US regulatory authorities occurred in 2023. The first one was a $100 million settlement between Coinbase and the New York Department of Financial Services (NYDFS).

2019-2022: US regulatory authorities win 8 major cryptocurrency settlements

At the end of 2019, US regulatory authorities reached their first significant cryptocurrency settlement with Block.one, the company behind EOS (now renamed B1). The US Securities and Exchange Commission (SEC) reached a $24 million settlement with Block.one regarding allegations of selling unregistered securities.

In 2020, the US SEC won two more significant cryptocurrency settlements. In May, BitClave, an ICO issuer, reached a $29.34 million settlement, and in June, Telegram settled for $1.24 billion regarding the issuance of its subsidiary TON Issuer’s Gram tokens. This $1.24 billion settlement includes $1.22 billion in ill-gotten gains and a $18.5 million civil penalty.

During the bull market of 2021, US regulatory authorities took three more major cryptocurrency enforcement actions against prominent industry participants. In August, cryptocurrency exchanges Poloniex and BitMEX reached settlements of $10.39 million and $100 million, respectively. Later, in October, stablecoin issuer Tether reached a $41 million settlement agreement with the CFTC, claiming that USDT is fully backed by US dollar assets. The CFTC also reached a settlement with Tether’s parent company Bitfinex, paying a $1.5 million fine for alleged illegal trading.

In 2022, cryptocurrency lending institution BlockFi reached a $100 million settlement with the US SEC and the North American Securities Administrators Association (NASAA). Additionally, cryptocurrency exchange Bittrex reached a $29 million settlement with the Treasury Department that same year.

Which regulatory authorities have led the 15 cryptocurrency enforcement actions?

So far, 7 US regulatory authorities that have filed cryptocurrency lawsuits have reached settlements with major industry participants 15 times. The US SEC alone has led or co-led 8 cryptocurrency lawsuits, ranking among the top 15 settlements to date. However, it is worth noting that the SEC was not involved in the coordinated settlement of Binance in November 2023.

Following closely are the Treasury Department and the CFTC, each leading or participating in 3 cryptocurrency lawsuits and settlements, and the FTC leading 2. Meanwhile, the US Department of Justice, the New York Department of Financial Services, and NASAA have each led or co-led 1 significant cryptocurrency lawsuit and settlement.

Top 15 Settlement Agreements between US regulatory authorities and cryptocurrency companies

As of November 24, 2023, here are the top 15 lawsuits and settlements between cryptocurrency companies and US regulatory agencies:

Research method: Based on official announcements from 2019 to November 24, 2023, this study investigated the settlement amounts reached between cryptocurrency companies and US regulatory agencies in federal court cases. The settlement year is attributed based on the date of the respective announcements and does not include charges against individuals.

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