Original title: "2024 Crypto Settlement Funds Reach a New High of Nearly $20 Billion, Will There Be a Regulatory Spring After the Election?"

Original Author: flowie, ChainCatcher

Recently, U.S. regulators seem to be catching up with performance for the 2024 fiscal year that is about to end, and have accelerated regulatory enforcement in the crypto field.

Last week, the Wall Street Journal reported that the federal government is investigating cryptocurrency company Tether for possible violations of sanctions and anti-money laundering regulations. Although denied by Tether, it still caused some panic in the market.

Throughout October, the SEC charged at least 20 crypto projects and individuals, including Cumberland, Gotbit, CLS, ZM Quant, Saitama and Robo Inu, and seized more than $25 million in cryptocurrencies. Many of the charges also involve the FBI and DOJ in joint enforcement, and crypto market makers and crypto trading institutions that are closer to the money have also become the focus of the crackdown.

With US regulators not slowing down their crypto reviews, the record of crypto litigation settlements in 2024 may hit a new high.

2024 crypto settlements hit a new high of nearly $20 billion, and leading companies became the focus of crackdowns

2024 was a year of surging crypto regulatory enforcement in the United States. According to Coingecko data, as of October 9, the crypto enforcement settlements of US regulators in 2024 reached nearly $20 billion, an increase of 78.9% over 2023, accounting for two-thirds of the total settlement amount in the past five years. Given that 2024 has not yet ended and regulators have not slowed down their actions, it is expected that this year's crypto litigation settlement record will surpass 2023.

From the perspective of the SEC alone, according to a report updated by social capital markets on October 19, the SEC's fines for the crypto sector in 2024 will be as high as $4.68 billion. Since 2013, the SEC has imposed a total of $7.42 billion in fines on cryptocurrency companies and individuals, which means that 63% of the fines were concentrated in 2024.

The amount of fines in 2024 is 3018% higher than the 150.26 million yuan in 2023.

Although the amount of fines is increasing, the number of incidents is decreasing. In 2024, the number of SEC crypto enforcement cases is only 11, far lower than the 30 in 2023.

The SEC's crypto enforcement strategy has obviously adjusted, and it has begun to take more influential enforcement actions (such as higher fines, more vigorous publicity, etc.) for representative cases to establish industry cases.

The SEC's huge fines this year were mainly contributed by Terra and its co-founder Do Kwon, which also set a precedent for SEC enforcement.

This year, except for Terra, the leaders of various crypto tracks have not escaped the clutches of SEC regulatory litigation.

In April, DeFi leaders Uniswap Labs and ConsenSys both received Wells Notices before the SEC’s pre-litigation, and were accused of violating securities laws with their products, failing to register as brokers, and participating in the issuance and sale of certain unregistered securities. Among them, ConsenSys was formally sued by the SEC on June 28.

On August 28, NFT market leader OpenSea and head crypto exchange Crypto.com also received Wells Notices, which accused them of NFTs or tokens traded on their markets that may be considered unregistered securities.

In October, the SEC also joined forces with the FBI and DOJ to crack down on Gotbit, the largest meme market maker, and accused head market maker Cumberland of violating securities laws.

Just as the market was guessing who the next regulatory target would be among US regulators? Fox Business reporter Eleanor Terrett recently said on the X platform that no major cryptocurrency players registered with the SEC in 2024, but the commission still included cryptocurrencies in its 2025 review focus list.

Terrett speculated that "the only two crypto assets that the SEC has interacted with in a regulatory role (rather than an enforcement role) are Bitcoin and Ethereum ETFs. Will the review focus on these ETFs and the companies that work with them?"

And according to the Wall Street Journal, the U.S. Treasury Department has set its sights on Tether, the largest stablecoin issuer.

Oppressive regulation is a catalyst for Meme, and Trump's coming to power is bad for Meme?

Castle Island Ventures co-founder Nic Carter said on his social platform that the hype of Meme coins is largely a reaction to the oppressive regulation of the SEC. If the SEC regulates rationally, the market demand for trading Meme coins will decrease.

Crypto KOL @WutalkWu also believes that one of the regulatory reasons for the popularity of Meme is that the SEC does not allow issuers to give value to tokens, otherwise they will be securities that need to be registered.

He said that under such regulatory conditions, many VC tokens have become Meme coins. VCs that should have invested in equity, shared income dividends, and followed for a long time have turned into hyping projects as Memes.

But if Trump is elected, the situation may change. Overseas crypto KOL @malekanoms analyzed that Trump's victory would have a negative effect on Meme.

@malekanoms believes that because the Republicans' victory will overturn all of this, the initial coin offering (ICOs) will be restored, airdrops will be realized, and other forms of token rationalization will be implemented. In addition, they may also make fee conversion and token dividends possible. The rationalized regulation in the United States has refocused the attention of cryptocurrencies on dApps and other really important things, but it may also lead to a long-term bear market.

Regulation increases corporate operating costs, and hiring officials has become a trend

In order to minimize the operating costs brought by huge fines, it has become a trend for crypto companies to hire government officials.

FOX reporters said that the SEC's "revolving door" phenomenon was particularly obvious this year, and many well-known officials left and entered private companies.

· Carolyn Welshhans, former acting head of the crypto assets and network department, joined Morgan Lewis to focus on securities enforcement matters.

· Former Enforcement Director Gurbir Grewal joins Milbank Law as a partner, and the firm is currently representing Binance and other clients in a lawsuit filed by the SEC while Grewal was in office.

· Former Crypto Assets and Cyber Unit Head David Hirsch joins McGuireWoods LLP to advise clients on crypto-related matters and cybersecurity regulations.

· Ladan Stewart, who has filed lawsuits against Coinbase and Ripple for the SEC, has also joined White & Case to help clients deal with SEC enforcement actions related to areas such as encryption.

In addition to hiring officials, Uniswap's launch of Unichain is, to some extent, a means of dealing with regulation. Crypto KOL @_FORAB believes that subsequent DeFi projects with local currency staking income should follow Uniswap's example and launch their own application chains to avoid securities-related regulatory issues. "After all, the cost of running a stand-alone chain is much less than paying a fine to the SEC."

Gary Gensler's term ends, will encryption regulation usher in spring?

In a few days, the 2024 US election will come to an end. Whether Trump or Harris wins, SEC Chairman Gary Gensler may step down early, and his term was originally due to expire on January 5, 2026.

But Trump made it clear at the Bitcoin Conference in July that he would fire Gensler, and the Harris team has met with people in the crypto industry and privately stated that it will reset industry relations.

U.S. Representative French Hill (R-AR) said in an interview with the Thinking Crypto podcast that the SEC should have new leadership next year, regardless of which party controls the White House.

Ripple Labs CEO Brad Garlinghouse also predicted that Gensler will leave after the upcoming presidential election, regardless of the outcome of the election.

According to CNBC, Gensler's potential successors include J. Christopher Giancarlo and Heath Tarbert, two chairmen of the Commodity Futures Trading Commission (CFTC) during Trump's first term, Dan Gallagher, the current chief legal officer of Robinhood and a two-term SEC commissioner, and Paul Atkins, a former SEC commissioner in the Bush administration.

From their past remarks or regulatory attitudes during their terms, almost all of them have a friendlier attitude towards cryptocurrencies than Gensler.

In addition to expecting a relaxation of the attitude of US regulators, crypto companies need a clear regulatory rule. Instead of spending a lot of manpower and material resources thinking about how to avoid being sued, crypto companies may be more looking forward to focusing on building clearer rules.

Consensys sent an open letter to the future US president last week, calling for clear and supportive regulations on cryptocurrencies and Web3.

SEC Commissioner Mark T. Uyeda also recently pointed out that Indo-Pacific countries such as Japan, Singapore and Hong Kong have already developed clear frameworks that support innovation and protect investors. In contrast, the United States lacks clear guidelines, which has left market participants facing uncertainty. He will urge the United States to take a more proactive attitude towards crypto regulation.

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