Banks Vs. Exchanges — Regulators Overwhelmingly Penalize Fiat, Not Crypto


While regulators have often targeted projects inside and outside the crypto space, the fines imposed on exchanging digital assets are only a fraction of those imposed on traditional financial institutions.

According to data from Good Jobs First’s violation tracker, the platform analyzed 50 of the largest fines imposed on major banks, investment firms and brokers over the past 20 years. Bank of America raised approximately $ 82 billion for 251 different fines including securities violations, while JPMorgan Chase and Citigroup were among the banks with the most fines in the world, with a total of $ 35.9 billion and $ 25.5 billion, respectively USA since 2000 belong.

While both large banks and crypto exchanges have often been fined for securities violations, data suggests that enforcement actions by US regulators against those in the crypto space cost these companies less than 1% of the traditional financial sector. Cointelegraph previously reported that from 2009 to early 2021, fines for cryptocurrency-related violations in the United States totaled $ 2.5 billion, while data from Good Jobs First shows $ 332.9 billion over the past 20 years US dollars in fines imposed by banks, investment firms and brokers.

One of the largest lawsuits came from the Securities and Exchange Commission (SEC) against Telegram’s 2018 Initial Coin Offering. The company was convicted of $ 1.2 billion in disgorgement and $ 18.5 million in civil fines in 2020 to pay after it was charged with violating securities laws. In contrast, Bank of America was the target of the Department of Justice’s largest fine – $ 16.6 billion – for selling “toxic” mortgages in connection with the 2008 financial crisis.

In cases where the SEC, the Commodity Futures Trading Commission, and the Financial Crimes Enforcement Network have been involved against crypto firms and individuals, unregistered securities offerings and fraud made up more than 90% of all fines. “Misuse of toxic securities,” as Good Jobs First describes it, represented about 29% – $ 97 billion – of the total of $ 332.9 billion in fines. In second place came investor protection violations at $ 68 billion.

Related: Enforcement measures by the SEC cost crypto firms

Although crypto firms continue to be the target of enforcement action from U.S. regulators – BitMEX agreed to pay up to $ 100 million in August to solve a CFTC and FinCEN case – there are signs that the country’s lawmakers are breaking the economic situation is becoming increasingly aware that there are no clear guidelines for innovative companies. Many U.S. senators and officials have endorsed proposals to change the language of an infrastructure that go to the Senate this month. The legislation proposes to introduce stricter rules for companies in dealing with cryptocurrencies and to expand the reporting requirements for brokers.

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