The Commodity Futures Trading Commission (CFTC) is pursuing more crypto crooks than ever before.
In a Tuesday announcement, the regulator said that its enforcement results for the year included a record number of cases in the digital asset space.
For the fiscal year of 2023, the CFTC brought 47 actions involving conduct related to digital asset commodities, the announcement read. This represents more than 49% of all actions and resulted in over $4.3 billion in penalties, restitution and disgorgement, it added.
“In financial year 2023, the CFTC cemented its reputation as a premier enforcement agency in the digital asset space,” the regulator’s statement said.
CFTC Chair Rostin Behnam added that he was “proud” of the body’s work in the crypto space.
Of the biggest actions in the space, the CFTC listed the charges it brought against collapsed digital asset exchange FTX, its ex-boss Sam Bankman-Fried and his failed trading firm Alameda Research; allegations against the world’s biggest crypto exchange Binance and its CEO; and its case against bankrupt crypto lender and its former CEO Alex Mashinsky.
Meanwhile, Securities and Exchange Commission Chair Gary Gensler has repeatedly been called on to testify before Congress about his agency's ability to regulate the crypto industry. When he appeared before the House Financial Services Committee in September, he got blasted for his "loyalty to big banks."
Rep. Patrick McHenry (R-NC), who for a short while was the interim speaker of the U.S. House of Representatives, didn't hold back during the Sept. 27 hearing.
“Your efforts to choke off the digital asset ecosystem… is clear to all,” he said, accusing Gensler of causing “more confusion and lasting damage” with his actions while calling out his agency for its “losing streak” in the courts.
Case in point: The SEC was recently ordered to review an application from Grayscale to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. The SEC rejected Grayscales application. After the asset manager sued the regulator to force the issue, a judge sided with Grayscale and said the SEC's rejections had been "arbitrary and capricious."
In its Tuesday release, the CFTC also noted that it had filed and settled charges against a number of decentralized finance (DeFi) protocols. DeFi refers to the industry in the crypto space that wants to replace banks and other traditional financial institutions with blockchain-based technology.
The American regulator added that three DeFi projects—Opyn, Inc, ZeroEx, Inc., and Deridex, Inc.—are alleged to have illegally offered leveraged and margined retail commodity transactions in digital asset commodities. Each of the companies has since settled with the CFTC.
Edited by Stacy Elliott.