The United States Securities Exchange Commission (SEC) has new regulatory limitations when it comes to punishing defendants with fines. The ruling would have altered the fines sought in some notable recent cryptocurrency-related cases.

According to a June 23 summary of the U.S. Supreme Court case Liu v. SEC in the National Law Review, the court ruled the SEC can not impose fines—known as disgorgements—that exceed the profits made from illegal activities. In addition, such penalties can only be “awarded for the benefit of victims”, not imposed as punitive damages.

The ruling applies to all defendants of course, but for crypto and blockchain firms facing possible charges by the SEC, this is effectively a stricter definition of “the punishment must match the crime” when it comes to financial penalties. The commission is already limited in its enforcement by a five-year statute of limitations.

The SEC case against crypto firm BitClave included $3.8 million in interest and extra penalties. The SEC charged a former pastor and his wife for stealing $500,000, part of which was obtained through a fake crypto offering backed by a bottled water business.

In that case the SEC sought fines matching all the ill-gotten gains, plus interest and civil penalties, a total which would have easily exceeded the original amount the couple reportedly stole.

However, under the recent ruling, the maximum fine the SEC could levy would be $500,000, which could only be used to repay those who had allegedly been swindled by the two.

And if the married couple had in fact used some of the money to actually provide the water they were offering, then the funds spent would have to be deducted from the total when the SEC calculated the appropriate fine.

As one of the largest financial regulators in the United States, the SEC is actively fighting fraudulent activity concerning digital assets and blockchain.

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