CFTC Tightens the Cryptocurrency Screw: In FY23, 50% of Cases Were Crypto-Related.

by Damian Chmiel
  • 49% of all regulatory actions concerned the digital assets market.
  • As part of the whistleblower program, the CFTC paid out $16 million in a year.
CFTC and Bitcoin
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In a decisive stride to enforce market laws and regulations, the Commodity Futures Trading Commission (CFTC) has issued a comprehensive report detailing its enforcement activities for Fiscal Year 2023 (FY23).

The report highlighted a landmark year for the Commission, particularly in regulating the burgeoning digital asset market. The CFTC's aggressive stance on misconduct has resulted in many cases and significant financial penalties. Half of all cases concerned crypto, showing that the CFTC is tightening the cryptocurrency screw.

CFTC Announces Record Digital Asset Cases in FY23

The year 2023 was marked by an impressive enforcement display from the CFTC , as it launched 96 actions against a range of malpractices, including fraud, market manipulation, and regulatory non-compliance.

A notable aspect of these actions was the vigorous pursuit of digital asset-related misconduct, with cases making up almost half of the year's total enforcement actions. Penalties, restitution, and disgorgement exceeded $4.3 billion, signaling the CFTC's heightened scrutiny and zero-tolerance policy towards market abuse.

The CFTC Chairman Rostin Behnam emphasized the Commission's "laser-focus" on eradicating fraud and manipulation to protect the integrity of the derivatives market.

"At a time of great uncertainty and volatility, healthy U.S. commodity markets are paramount to ensuring a strong economy. The CFTC will continue to take all necessary action to protect customer funds and ensure fair prices for U.S. consumers. I thank the Division staff for their hard work over the last fiscal year," Behnam added.

Biggest CFTC’s Cases during Last Year

The CFTC's report highlighted several high-profile cases in the wide foray of tradable assets. Among these was the crypto action against Sam Bankman-Fried and associated entities for an alleged multi-billion dollar fraudulent scheme. The year additionally witnessed charges against the digital asset lending platform Binance for operating an unregistered commodity pool.

On top of digital asset enforcement, the CFTC tackled manipulative practices like spoofing, with settlements and penalties against major financial institutions, including HSBC and Goldman Sachs.

The CFTC's commitment extended to ensuring compliance with risk management and reporting obligations, evidenced by a series of actions against entities for recordkeeping and supervisory failures.

“The Division of Enforcement’s FY 2023 results demonstrate the CFTC’s relentless commitment to accountability, deterrence, customer protection, and ensuring market integrity,” said the Director of Enforcement at CFTC, Ian McGinley.

Also, at the heart of the CFTC's mandate is customer protection. The FY 2023 report recounts significant wins in this arena, with millions ordered in restitution to victims of various schemes.

Whistleblower Impact and Specialized Task Forces

The Whistleblower Program has been instrumental in the CFTC's enforcement successes, with awards granted to individuals whose information led to successful actions. This program underscores the value of insider information in policing the markets.

“In FY 2023, the CFTC granted seven applications for whistleblower awards, totaling approximately $16 million, for individuals who voluntarily provided original information that led to successful enforcement actions,” the regulator said.

Since the inception of the Whistleblower Program through FY 2023, the CFTC has issued 41 orders granting awards totaling almost $350 million. The total sanctions ordered in all whistleblower-related enforcement actions has surpassed the $3 billion milestone.

Furthermore, in FY 2023, the DOE launched specialized task forces to focus on sophisticated areas like cybersecurity, emerging technologies, and environmental fraud, utilizing expert knowledge to tackle intricate market challenges.

In a decisive stride to enforce market laws and regulations, the Commodity Futures Trading Commission (CFTC) has issued a comprehensive report detailing its enforcement activities for Fiscal Year 2023 (FY23).

The report highlighted a landmark year for the Commission, particularly in regulating the burgeoning digital asset market. The CFTC's aggressive stance on misconduct has resulted in many cases and significant financial penalties. Half of all cases concerned crypto, showing that the CFTC is tightening the cryptocurrency screw.

CFTC Announces Record Digital Asset Cases in FY23

The year 2023 was marked by an impressive enforcement display from the CFTC , as it launched 96 actions against a range of malpractices, including fraud, market manipulation, and regulatory non-compliance.

A notable aspect of these actions was the vigorous pursuit of digital asset-related misconduct, with cases making up almost half of the year's total enforcement actions. Penalties, restitution, and disgorgement exceeded $4.3 billion, signaling the CFTC's heightened scrutiny and zero-tolerance policy towards market abuse.

The CFTC Chairman Rostin Behnam emphasized the Commission's "laser-focus" on eradicating fraud and manipulation to protect the integrity of the derivatives market.

"At a time of great uncertainty and volatility, healthy U.S. commodity markets are paramount to ensuring a strong economy. The CFTC will continue to take all necessary action to protect customer funds and ensure fair prices for U.S. consumers. I thank the Division staff for their hard work over the last fiscal year," Behnam added.

Biggest CFTC’s Cases during Last Year

The CFTC's report highlighted several high-profile cases in the wide foray of tradable assets. Among these was the crypto action against Sam Bankman-Fried and associated entities for an alleged multi-billion dollar fraudulent scheme. The year additionally witnessed charges against the digital asset lending platform Binance for operating an unregistered commodity pool.

On top of digital asset enforcement, the CFTC tackled manipulative practices like spoofing, with settlements and penalties against major financial institutions, including HSBC and Goldman Sachs.

The CFTC's commitment extended to ensuring compliance with risk management and reporting obligations, evidenced by a series of actions against entities for recordkeeping and supervisory failures.

“The Division of Enforcement’s FY 2023 results demonstrate the CFTC’s relentless commitment to accountability, deterrence, customer protection, and ensuring market integrity,” said the Director of Enforcement at CFTC, Ian McGinley.

Also, at the heart of the CFTC's mandate is customer protection. The FY 2023 report recounts significant wins in this arena, with millions ordered in restitution to victims of various schemes.

Whistleblower Impact and Specialized Task Forces

The Whistleblower Program has been instrumental in the CFTC's enforcement successes, with awards granted to individuals whose information led to successful actions. This program underscores the value of insider information in policing the markets.

“In FY 2023, the CFTC granted seven applications for whistleblower awards, totaling approximately $16 million, for individuals who voluntarily provided original information that led to successful enforcement actions,” the regulator said.

Since the inception of the Whistleblower Program through FY 2023, the CFTC has issued 41 orders granting awards totaling almost $350 million. The total sanctions ordered in all whistleblower-related enforcement actions has surpassed the $3 billion milestone.

Furthermore, in FY 2023, the DOE launched specialized task forces to focus on sophisticated areas like cybersecurity, emerging technologies, and environmental fraud, utilizing expert knowledge to tackle intricate market challenges.

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