The CFTC’s Crackdown on Crypto Crooks
The Commodity Futures Trading Commission (CFTC) has announced that it is aggressively pursuing cases involving digital assets, with a record number of enforcement actions in the fiscal year of 2023. The regulator reported bringing 47 actions related to digital asset commodities, accounting for over 49% of all its actions and resulting in more than $4.3 billion in penalties, restitution, and disgorgement.
The CFTC emphasized its commitment to being a premier enforcement agency in the digital asset space, with Chair Rostin Behnam expressing pride in the body’s work in the crypto sector. Notable cases included charges against FTX, Binance, and bankrupt crypto lender Alex Mashinsky.
Congressional Scrutiny of SEC Chair Gary Gensler
Meanwhile, Securities and Exchange Commission Chair Gary Gensler has faced criticism from Congress regarding his agency’s regulation of the crypto industry. During a hearing before the House Financial Services Committee, Rep. Patrick McHenry accused Gensler of stifling the digital asset ecosystem and causing confusion and lasting damage with his actions.
The SEC’s rejection of Grayscale’s application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF was also highlighted as an example of the agency’s regulatory approach facing legal challenges.
The CFTC’s Focus on DeFi Protocols
In addition to its actions against traditional crypto entities, the CFTC also filed and settled charges against several decentralized finance (DeFi) protocols. The regulator alleged that Opyn, Inc, ZeroEx, Inc., and Deridex, Inc. had illegally offered leveraged and margined retail commodity transactions in digital asset commodities, with each company reaching a settlement with the CFTC.
Hot Take: Regulators’ Impact on Crypto
Regulatory scrutiny of the crypto industry continues to intensify as agencies like the CFTC and SEC ramp up enforcement efforts. The outcome of these regulatory actions will likely have significant implications for how cryptocurrencies and digital assets are traded, structured, and accessed by investors in the future.
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