Disgorgement

Definition ∞ Disgorgement refers to the act of giving up profits or assets that were obtained illegally or unethically. In the context of digital assets and financial regulation, it often involves returning ill-gotten gains to victims or a designated authority. This measure serves as a punitive action intended to deter fraudulent activities. It is a critical tool employed by regulatory bodies to enforce compliance and restore fairness within financial markets.
Context ∞ Disgorgement orders against entities involved in the digital asset space are frequently reported by regulatory bodies like the Securities and Exchange Commission (SEC). Current discussions often center on the scale of funds ordered for disgorgement and the mechanisms for distributing these assets back to affected parties. A critical future development to monitor is the increasing use of blockchain analytics to trace illicit funds and the subsequent enforcement actions related to disgorgement penalties in the crypto sector.