As digital currency fraud surges, CFTC Commissioner Christy Goldsmith Romero admits the regulatory challenges in policing it.
The growing menace of digital currency fraud is proving as well vast to be entirely policed, acknowledged a leading United States regulating authority on Tuesday, regardless of her agency’s earnest efforts to tackle numerous high-profile cases.
Reports by a report by Reuters published on May 2, 2023, Christy Goldsmith Romero, serving as one of the 5 commissioners at the Commodity Futures Trading Commission (CFTC), disclosed that cryptocurrency-related cases as of now comprise around a fifth of the agency’s total caseload. This includes the past few civil actions instigated against renowned cryptocurrency exchanges Binance Crypto exchange and FTX.
The surge of fraudulent activity within the digital currency sphere is causing serious concern. At a white-collar felony conference held by the New York City Bar Association, Goldsmith Romero stated, “ There is an overwhelming amount of fraud in the space. We are faced with the impossibility of policing all the fraud, but we can’t sit idle.”
As a result to the escalating situation, CFTC Chairman Rostin Behnam has sought to expand the agency’s power through increased legislative support explicitly aimed at overseeing spot cryptocurrency markets.
Goldsmith Romero rejected the notion of an ongoing power struggle, or “turf war,” betwixt the CFTC and the Securities and Exchange Commission (SEC) over the task of regulating digital currencies. She did, on the other hand, recognize that numerous new products in the industry have left the agencies in a state of flux, with regulatory frameworks “still being figured out.”
Goldsmith Romero likewise cautioned cryptocurrency corporations against perceiving the CFTC as a more lenient regulating authority than the more financially robust SEC. “I take exception to the notion that the CFTC is a ‘light touch’,” stated Goldsmith Romero. “The epitaph ‘light touch regulator’ will never grace my tombstone.”
In a notable move earlier in the year, the CFTC launched a lawsuit against Binance Crypto exchange and its founder and CEO, Changpeng Zhao, alleging the operation of a sham compliance program. Zhao, on the other hand, dismissed the states, referring to the complaint as an “incomplete recitation of facts.”
The agency has likewise taken legal action against the now insolvent FTX Trading Ltd exchange and its founder, Sam Bankman-Fried, accusing them of precipitating the loss of more than $8 Billion in customer deposits. Bankman-Fried has since entered a not-guilty plea to related criminal charges filed by the United States Department of Justice.