The growing number of crypto-related fraud and manipulation cases requires more resources from regulators, according to the Commodity Futures Trading Commission (CFTC) chairman Rostin Behnam, The Wall Street Journal reported.
“Headlines about the loss of tens of millions of dollars in digital assets due to protocol exploits, phishing attacks, preying on vulnerable people, and other fraudulent and manipulative schemes have become far too common,” Behnam said during a video appearance at the Chainalysis Links conference on Wednesday.
Behnam also argued that “recent global conflicts have highlighted the ability for digital assets to be a tool for those who present risks to the broader American economy, the public and our way of life.”
The CFTC Chairman's remarks came in the wake of the collapse of Terra, which sent waves of shock across the entire crypto market.
As data from CoinMarketCap shows, about $350 billion of crypto's total market capitalization was wiped out over the past ten days. These losses included Bitcoin, Ethereum, and many other cryptocurrencies beyond just Terra's LUNA and algorithmic stablecoin UST.
According to Behnam, the CFTC has filed more than 50 enforcement actions related to activity since 2015, with 23 of those cases filed within the last fiscal year.
More than half of the total number of crypto-related cases involved allegations of fraud, he added.
“I also call on everyone here today to continue to advocate and support regulatory obligations that will make these markets more transparent, safer, and resilient,” said Behnam. “I’ve said many times, the crypto markets present unique characteristics that would benefit from the federal market oversight.”
CFTC joins SEC in crypto concerns
The CFTC, which oversees American derivatives markets, is not the only regulator expressing its intent to bring more crypto-focused staff onboard.
Earlier this month, the U.S. Securities and Exchange Commission (SEC) announced it was expanding its crypto investigations unit—now renamed to “Crypto Assets and Cyber Unit”—to 50 people who will be tasked with overseeing crypto exchanges, lending and staking services, decentralized finance (DeFi) projects, stablecoins, and the NFT sector.
On Wednesday, SEC Chairman Gary Gensler expressed his concern that more investors will suffer losses in the future, per a Fox Business report.
"I think a lot of these tokens will fail," Gensler told reporters after a House Appropriations Committee panel hearing. "I fear that in crypto…there’s going to be a lot of people hurt, and that will undermine some of the confidence in markets.”