Record Number of Digital Asset-Related Enforcement Cases
Almost half of all the enforcement cases brought by the Commodity Futures Trading Commission in its 2023 fiscal year were related to digital assets, according to the agency’s latest report. Out of 96 total actions, 47 were related to digital assets, including cases against former FTX CEO Sam Bankman-Fried, crypto exchange Binance and its CEO Changpeng Zhao, and Celsius and its former CEO Alex Mashinsky.
The CFTC highlighted that it has cemented its reputation as a premier enforcement agency in the digital assets space. In fiscal year 2022, the agency brought 18 actions related to digital assets.
CFTC Chair Rostin Behnam commended the Division of Enforcement’s groundbreaking work in the digital asset space, emphasizing the agency’s dedication to holding registrants and market participants accountable for their conduct in CFTC regulated markets.
Regulatory Efforts and Focus on DeFi
The CFTC’s strong focus on digital assets aligns with lawmakers’ efforts to regulate crypto. The “Fit for the 21st Century Act,” currently being considered by the full House, aims to bolster the CFTC’s authority and close regulatory gaps between the CFTC and the Securities and Exchange Commission.
Moreover, the CFTC has turned its attention to decentralized finance (DeFi), charging three DeFi protocols for offering “illegal digital asset derivatives trading” and scoring a win in a case against Ooki DAO, setting a precedent for holding decentralized autonomous organizations liable for legal violations as “persons.”
Hot Take: Continued Vigilance in Digital Assets Regulation
The record number of digital asset-related enforcement cases by the CFTC reflects an intensified focus on regulating this rapidly evolving space. With ongoing legislative efforts aimed at strengthening regulatory oversight, it is evident that authorities are committed to addressing fraud and manipulation while adapting to emerging technologies like DeFi. As the regulatory landscape continues to evolve, market participants can expect increased scrutiny and enforcement actions in the digital asset sector.
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