CFTC Criticized for Lack of Crypto Support by U.S. Regulator

CFTC Criticized for Lack of Crypto Support by U.S. Regulator

The CFTC warns crypto companies against perceiving them as a more friendly regulator than the SEC, as crypto cases now constitute 20% of their portfolio, amidst a surge of US crypto crackdowns prompting businesses to consider relocating offshore.

Cryptocurrency News: The  United States has witnessed a surge in cryptocurrency crackdowns, prompting enterprises to consider relocating their operations offshore. Amidst these developments, a prominent United States regulating authority announced a strong statement, cautioning cryptocurrency corporations against perceiving the Commodity Futures Trading Commission (CFTC) as a potentially friendlier regulating authority than the opulent Securities and Exchange Commission (SEC).

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Christy Goldsmith Romero, one of the 5 commissioners at the CFTC, revealed that digital currency cases now constitute approximately 20 percent of the agency’s portfolio. This includes recent civil cases brought against major exchanges such as Binance Crypto exchange and FTX Trading Ltd. In March, the CFTC filed a lawsuit against Binance Crypto exchange and its CEO Changpeng “CZ” Zhao, alleging the operation of a sham compliance program. CZ countered the states, describing them as an incomplete representation of facts.

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In addition, the regulating authority voiced her dissent over the belief that the CFTC has a “light touch” in the case of regulating digital currencies. Although while taking a dig on the matter, Romero was quoted as saying:

Light touch regulating authority would never be written on my tombstone.

Goldsmith Romero dismissed the notion of hostility betwixt the CFTC and the SEC in terms of regulating the new class of digital assets. Nonetheless, she acknowledged that certain cryptocurrency products have presented challenges for regulatory bodies, as they continue to understand the nascent industry. On the other hand, CFTC Chairman Rostin Behnam has been found to actively seek expanded authority from lawmakers to oversee spot cryptocurrency markets, suggesting a growing interest in strengthening oversight.

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Growing Number Of Cryptocurrency Frauds

Addressing the growing number of fraud cases in the cryptocurrency market, Romero emphasized the need for action, stating that it is impossible to police all instances of fraud but highlighting the urgency to take appropriate measures. The CFTC recently filed a case against the now-defunct FTX Trading Ltd, accusing the exchange and its founder, Sam Bankman-Fried, of causing losses exceeding $8 Billion in customer deposits.

The cryptocurrency crackdowns in the United States highlight the pressing need for regulatory clarity and coordinated efforts between regulatory authorities to effectively address emerging challenges. As already  stated earlier on CoinGape, United States’ largest digital currency exchange Coinbase Crypto exchange, recently filed a mandamus petition against the SEC to enforce clear regulatory guidelines on digital assets.

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