Crypto Industry Faces $19 Billion in Lawsuit Settlements in 2024: Report

U.S. regulators have secured over $19 billion in settlements from crypto companies so far in 2024, with bankrupt exchange FTX and its affiliate, Alameda Research, responsible for the bulk of these payments. According to a recent report by CoinGecko, FTX and Alameda paid $12.7 billion in August as part of a settlement with the Commodity Futures Trading Commission (CFTC), marking the largest individual contribution to this year’s totals.

The surge in settlement amounts comes as U.S. regulators intensify their scrutiny of the cryptocurrency sector following several high-profile collapses. So far in 2024, eight major settlements have been reached, with the total amount representing a 78% increase compared to 2023. Remarkably, this year’s figures mark an astronomical 8,327% jump from 2022.

The settlements include a mix of forfeiture, civil penalties, and disgorgement, but notably exclude individual lawsuits against executives. The regulatory environment remains highly active, and additional settlements are expected before the year concludes.

Terraform Labs and Genesis Among Top Payers

The collapse of Terraform Labs in 2022, which was followed by the failure of its algorithmic stablecoin TerraUSD (UST), also played a significant role in 2024’s settlement figures. Terraform Labs reached a $4.47 billion settlement with the Securities and Exchange Commission (SEC), making it the second-largest payout of the year.

Genesis, another prominent player in the crypto space, contributed to the year’s massive total with a $2 billion settlement in August. The company had filed for bankruptcy in early 2023, and the settlement was reached with the Office of the Attorney General (OAG).

Lim Yu Qian, a research analyst at CoinGecko, believes that the downfall of companies like Celsius and Terraform Labs in mid-2022 catalyzed a regulatory shift that led to more aggressive action. “The fall of FTX further fueled this scrutiny, leading to a surge in settlements,” Qian said.

No Signs of Slowing Down

As 2024 draws to a close, regulatory actions show no signs of slowing. CoinGecko’s report suggests that U.S. regulators may continue to pursue additional settlements before the year ends. “2024 has already seen a 78.9% increase in settlement value compared to last year, and regulators remain relentless,” Qian noted.

One notable case from 2023 was Binance, which reached a billion-dollar settlement despite still operating at the time. The resolution involved several agencies, including the Department of Justice (DOJ), CFTC, and the Treasury Department, signaling continued regulatory pressure on the crypto industry. Since 2019, U.S. regulators have collected roughly $31.92 billion from the crypto sector in settlements.