As digitalย currency fraud surges, CFTC Commissioner Christy Goldsmith Romero admits the regulatory challenges in policing it.
The growing menace of digitalย currency fraud is proving asย well vast to be entirely policed, acknowledged a leading Unitedย States regulatingย authority on Tuesday, regardlessย of her agencyโs earnest efforts to tackle numerous high-profile cases.
Reportsย 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 asย ofย now comprise around a fifth of the agencyโs total caseload. This includes theย pastย few civil actions instigated against renowned cryptocurrency exchanges Binanceย Cryptoย exchange and FTX.
The surge of fraudulent activity within the digitalย currency sphere is causing serious concern. At a white-collar felony conference held by the New York City Bar Association, Goldsmith Romero stated, โ Thereย is an overwhelming amount of fraud in the space. We are faced with the impossibility of policing all the fraud, but we canโt sit idle.โ
Asย aย result to the escalating situation, CFTC Chairman Rostin Behnam has sought to expandย the agencyโs power through increased legislative support explicitly aimed at overseeing spot cryptocurrency markets.
Goldsmith Romero rejected the notion of an ongoing power struggle, or โturf war,โ betwixt the CFTC and the Securities and Exchange Commission (SEC) over the task of regulating digitalย currencies. She did, onย theย otherย hand, recognize that numerous new products in the industry have left the agencies in a state of flux, with regulatory frameworks โstill being figured out.โ
Goldsmith Romero likewise cautioned cryptocurrency corporations against perceiving the CFTC as a more lenient regulatingย authority than the more financially robust SEC. โI take exception to the notion that the CFTC is a โlight touchโ,โ stated Goldsmith Romero. โThe epitaph โlight touch regulatorโ will never grace my tombstone.โ
In a notable move earlier inย theย year, the CFTC launched a lawsuit against Binanceย Cryptoย exchange and its founder and CEO, Changpeng Zhao, alleging the operation of a sham compliance program. Zhao, onย theย otherย hand, dismissed the states, referring to the complaint as an โincomplete recitation of facts.โ
The agency has likewise taken legal action against the now insolvent FTXย Tradingย Ltd exchange and its founder, Sam Bankman-Fried, accusing them of precipitating the lossย ofย moreย than $8 Billion in customer deposits. Bankman-Fried has since entered a not-guilty plea to related criminal charges filed by the Unitedย States Department of Justice.
