Hafez Financial Services


Banks vs. exchanges — regulators overwhelmingly penalize fiat, not crypto


Data from a recent report suggest that enforcement actions from U.S. regulators against those in the crypto space cost those firms less than 1% of that in traditional finance for the last 20 years.
According to data from Good Jobs First’s violation tracker, the platform analyzed 50 of the biggest fines regulators levied against major banks, investment firms, and brokers over the last 20 years. Bank of America accrued roughly $82 billion covering 251 different fines including securities violations, while JPMorgan Chase and Citigroup were also some of the most fined banks in the U.S. since 2000 with penalties totaling $35.9 billion and $25.5 billion, respectively.
One of the largest actions came from the Securities and Exchange Commission, or SEC, against Telegram’s 2018 initial coin offering. The company was ordered to pay $1.2 billion in disgorgement and $18.5 million in civil penalties in 2020 after being charged for violating securities laws. In contrast, Bank of America was the target of the largest fine from the Department of Justice — $16.6 billion — for selling “toxic” mortgages related to the 2008 financial crisis.
In cases which involved the SEC, Commodity Futures Trading Commission, and Financial Crimes Enforcement Network against crypto firms and individuals, unregistered securities offerings and fraud accounted for more than 90% of all fines. “Toxic securities abuses,” as Good Jobs First describes them, accounted for roughly 29% — $97 billion — of the $332.9 billion in total penalties. Investor protection violations came in second with $68 billion.

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