Crypto has become a topic of interest in the financial markets in 2023 due to a report from the Commodities and Futures Trading Commission (CFTC) revealing that over half of the agency’s total enforcement actions were related to crypto. The report showed that the CFTC brought 47 actions involving conduct related to digital asset commodities, accounting for over 49% of all actions during the period. These actions generated $4.3 billion in penalties, restitution, and disgorgement over the fiscal year.
Cracking Down on Crypto
The CFTC filed high-profile complaints addressing frauds by major exchanges, individual Ponzi-schemers, and others. One major action included charges against FTX, Alameda Research, and their executives for a multi-billion dollar fraud against the defunct exchange’s customers. Another case involved charges against Binance and its founder, Changpeng Zhao for illegally operating a crypto derivatives exchange and for evading CFTC regulations and commodities laws.
The CFTC’s Largest Civil Monetary Penalty
The CFTC also won orders requiring a $1.7 billion civil monetary penalty from a South African crypto exec – the largest in the agency’s history. The agency also successfully charged Mango Markets hacker Avraham Eisenberg for illegally obtaining $110 million from the Defi Protocol using price manipulation techniques.
Hot Take
Despite the rise in crypto-related charges, Chairman Rostin Behnam expressed pride in the Division of Enforcement’s groundbreaking work in the digital asset space. The Securities and Exchange Commission (SEC), the CFTC’s sister U.S. market regulator, has launched over 50 separate enforcement actions against crypto firms this year – including against FTX and Binance, as well as Coinbase.
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