US financial regulators, most notably the Securities and Exchange Commission (SEC), have handed out as much as $2.5 billion (€2.1 billion) in fines in the cryptocurrency sector since the launch of Bitcoin (BTC) in 2009. reports analysis company Elliptic on June 21.
A staggering $1.69 billion, or about 68% of the $2.5 billion in fines, came from the SEC. Then comes the Commodity Futures Trading Commission (CFTC) with $624 million, then the Financial Crimes Enforcement Network (FinCEN) with $183 million and finally the Office of Foreign Assets Control (OFAC) with $0.6 million.
The vast majority of fines were issued for the sale of unlicensed securities, at $1.38 billion or 55% of the total. Ripple is currently in a lawsuit with the SEC regarding this issue with XRP.
A caveat should be made, namely $1.2 billion comes from the Telegram case. Telegram reached a settlement with the SEC in 2020 to pay back $1.2 billion to investors for the Gram token. As Sam Bankman-Fried, CEO of cryptocurrency exchange FTX says, this is a huge outlier that distorts the total:
A comment with regard to other sectors may also be in order. In 2018, it was revealed that US banks have paid as much as $243 billion in fines since the 2008 financial crisis, despite large amounts being forgiven. Bank of America alone paid a whopping $76.1 billion in fines.
According to Dr. Tom Robinson, co-founder of Elliptic, the numbers indicate that the crypto world is not the “wild west of finance” at all, as some people think:
“Our analysis of crypto-asset-related enforcement actions in the US shows that crypto is far from the ‘wild west’ of finance. Regulators have successfully used existing laws to stop and punish illegal activities that have exploited crypto assets.”