Elliptic estimates U.S. penalties against crypto industry total $2.5 billion

The total penalties on crypto startups and individuals since 2009 amounted to $2.5 billion, according to Elliptic.

Elliptic’s analysis of US regulatory enforcement actions since the birth of Bitcoin in 2009 shows that $2.5 billion in penalties have been imposed against firms and individuals dealing in crypto ➡️ https://t.co/i3hoWhrcLI

— elliptic (@elliptic) June 21, 2021

Two-thirds of the amount went to the SEC ($1.68 billion). The remainder was collected by the CFTC ($624 million), the Financial Crimes Enforcement Network (FinCEN) within the U.S. Treasury ($183 million), and the Office of Foreign Assets Control ($0.6 million).

Fifty-five percent of penalties relate to unregistered securities sales ($1.38 billion) and fraud ($928 million). Penalties for violations of anti‑money‑laundering laws totalled $183 million.

The first sanctions against crypto-industry participants in the United States date back to 2014. The firm Trendon T. Shavers and Bitcoin Savings and Trust were ordered to pay $40 million for organising a Ponzi scheme with an estimated loss of 700,000 BTC.

The largest contribution to the total came from the SEC settlement with Telegram over the TON token sale. Under the terms of the settlement, Pavel Durov’s company agreed to pay the agency a fine of $18.5 million and to return $1.22 billion to investors.

In the top five penalties, besides Telegram, is a $122 million penalty from FinCEN against the now-defunct BTC-e exchange and its alleged leader, Alexander Vinnik.

Elliptic emphasised that their analysis undermines the comparison of the crypto industry to the “Wild West”. Regulators have successfully used existing laws to halt illicit activity and bring its perpetrators to account, they said.

Analysts concluded that such enforcement outcomes point to growing legitimacy and recognition of digital assets.

In an interview with Bloomberg, Elliptic co-founder Tom Robinson said that penalties did not slow the industry but helped its growth.

“Consumers and businesses have become convinced of the transparency of regulation,” he explained.

Robinson expects increased scrutiny of overseas crypto exchanges.

“Ransomware proceeds are laundered on these exchanges. Solving this problem will be crucial to reducing the number of ransomware attacks,” said the Elliptic co‑founder.

Earlier in March, media reported on an alleged investigation by the CFTC into Binance.

In June, the world’s largest meat processor, JBS, paid hackers a ransom of $11 million in Bitcoin.

Earlier, the DarkSide hackers attacked Colonial Pipeline. For restoring operations and recovering data, the company paid the attackers 75 BTC.

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