Top 15 Cryptocurrency Enforcement Actions in the U.S.: Binance's $4.3 Billion Settlement Ranks Second

Original Author | CoinGecko Lim Yu Qian

Compiled by | Odaily Planet Daily Nian Yinsi Tang

Editor's Note: CoinGecko recently released the report “US Regulators v Crypto: $12.4 B in Largest Settlements” report, which outlines the settlement agreements between U.S. regulators and major crypto companies, listing the Top 15 crypto enforcement actions in the country. Odaily Planet Daily has compiled the following:

Top 15 Crypto Enforcement Actions in the U.S.

In the crypto lawsuits initiated by U.S. regulators, the now-bankrupt crypto lending institution Celsius agreed to pay $4.7 billion, making it the largest settlement to date. Celsius reached a settlement in July 2023 with the Federal Trade Commission (FTC) regarding the company's violations of investor protection. However, it should be noted that the payment of the settlement is delayed until after its bankruptcy proceedings.

Binance's $4.3 billion settlement makes it the second-largest enforcement action. Even so, the settlement with Binance is still considered a "landmark victory" for U.S. regulators, as it is the only multi-billion dollar settlement paid by an operating cryptocurrency company to date. Binance agreed to plead guilty in November 2023 to resolve lawsuits with several U.S. regulators, including the Department of Justice (DOJ), the Treasury Department, and the Commodity 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 with the FTC in October 2023. Similar to Celsius, Voyager's settlement payment is also delayed until after its bankruptcy proceedings.

So far, among the crypto lawsuits initiated by U.S. regulators, only 15 have reached settlements exceeding $10 million. In contrast, Violation Tracker data shows that the traditional financial services industry has 48 lawsuits with settlement amounts exceeding $1 billion.

In the Top 15 crypto enforcement actions initiated in the U.S., violations of investor protection, insufficient anti-money laundering (AML), and violations of economic sanctions are the main types of charges.

When Did Major U.S. Crypto Enforcement Actions Occur?

Among the 15 largest crypto enforcement actions in the U.S., nearly half, 7, reached settlements in 2023 (accounting for 47%). Following the collapse of centralized cryptocurrency exchange FTX in November 2022, regulatory scrutiny of the crypto industry has intensified globally this year.

It is also worth mentioning that the top four crypto lawsuit settlements with U.S. regulators all occurred in 2023, starting with Coinbase's $100 million settlement with the New York Department of Financial Services (NYDFS).

2019 to 2022: U.S. Regulators Win 8 Major Crypto Lawsuit Settlements

At the end of 2019, U.S. regulators reached the first significant crypto lawsuit settlement with Block.one (now renamed B1), the company behind EOS. At that time, the Securities and Exchange Commission (SEC) reached a $24 million settlement with Block.one regarding allegations of selling unregistered securities.

In 2020, the U.S. SEC won two major crypto lawsuits, with the ICO issuer BitClave settling for $29.34 million in May, and Telegram settling for $1.24 billion in June regarding the issuance of its Gram tokens under its subsidiary TON Issuer. This $1.24 billion settlement included $1.22 billion in illegal gains and $18.5 million in civil penalties.

During the bull market in 2021, U.S. regulators took three major enforcement actions against well-known industry participants. In August, cryptocurrency exchanges Poloniex and BitMEX settled with regulators for $10.39 million and $100 million, respectively. Then in October, stablecoin issuer Tether reached a $41 million settlement with the CFTC, claiming that USDT is fully backed by dollar assets. The CFTC also reached a settlement with Tether's parent company Bitfinex, paying a $1.5 million fine for illegal trading allegations.

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

Which Regulatory Agencies Led the 15 Crypto Enforcement Actions?

So far, 7 U.S. regulatory agencies that initiated crypto lawsuits have reached 15 settlements with major industry participants. The SEC alone has led or co-led 8 crypto lawsuits, which rank among the top 15 settlements to date, but it is noteworthy that the SEC did not participate in the Binance settlement coordinated in November 2023.

Following closely are the Treasury Department and the CFTC, each leading 3 cryptocurrency lawsuit settlements, while the FTC led 2. Meanwhile, the DOJ, the New York Department of Financial Services, and NASAA each led or co-led 1 major crypto lawsuit settlement.

Top 15 Settlement Agreements Between U.S. Regulators and Crypto Companies

As of November 24, 2023, the Top 15 settlements between crypto companies and U.S. regulators are as follows:

Research Methodology: Based on official announcements from 2019 to November 24, 2023, this study investigated the settlement amounts reached by crypto companies in federal court cases with U.S. regulators. The settlement years are attributed based on the dates of their respective announcements, excluding allegations against individuals.