According to a recent study, authorities’ actions against cryptocurrency companies have cost them less than 1% of the total cost of traditional financing over the last two decades.
In spite of the fact that authorities have frequently targeted projects both inside and outside of the cryptocurrency field, the fines assessed against digital asset exchanges are a fraction of the penalty levied against traditional financial institutions.
Over the previous two decades, data from Good Jobs First’s violation tracker has been used to examine 50 of the largest fines regulators have levied against major financial institutions such as banks, investment firms and brokerage firms.
Bank of America has accrued approximately $82 billion in fines, which include 251 different types of violations, including securities violations. JPMorgan Chase and Citigroup have also been among the most heavily penalized banks in the United States since 2000, with penalties totaling $35.9 billion and $25.5 billion, respectively, since 2000.
However, while both major banks and cryptocurrency exchanges have been penalized for securities violations in the past, data suggests that enforcement actions taken by U.S. regulators against firms in the crypto space have cost those firms less than one percent of the money spent on enforcement actions against firms in the traditional finance sector.
Cointelegraph previously reported that from 2009 to early 2021, fines for crypto-related violations totaled $2.5 billion in the United States, while Good Jobs First’s data shows that banks, investment firms, and brokers were fined a total of $332.9 billion in the last 20 years, according to the organization.
The Securities and Exchange Commission, took one of the most significant proceedings against Telegram’s 2018 initial coin offering, which was one of the largest in history.
Upon being found guilty of violating securities laws, the business was sentenced to pay $1.2 billion in disgorgement and $18.5 million in civil penalties in 2020, which will be paid in 2020.
Bank of America, on the other hand, was hit with the biggest fine ever levied by the Department of Justice – $16.6 billion — for marketing “toxic” mortgages during the financial crisis of 2008.
Unregistered securities offers and fraud contributed for more than 90 percent of all fines in proceedings involving the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Financial Crimes Enforcement Network against cryptocurrency organizations and individuals.
As described by Good Jobs First, “toxic securities abuses” amounted for approximately 29 percent – $97 billion — of the $332.9 billion in total penalties, or roughly $97 billion. With $68 billion in fines, investor protection infractions came in second place.
Despite the fact that crypto firms continue to be the target of enforcement action by U.S. regulators — in August, BitMEX agreed to pay up to $100 million to settle a case brought by the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network .
There are signs that lawmakers in the country are becoming increasingly aware of the economic impact of not having clear guidelines for innovative businesses.
Many senators and congressmen in the United States have backed efforts to change language in an infrastructure bill that will be considered by the Senate later this month.
The proposed legislation calls for the implementation of stricter regulations for enterprises that deal with cryptocurrency, as well as the expansion of reporting requirements for brokers.