According to the latest report from the Commodity Futures Trading Commission (CFTC) of the United States, nearly half of all enforcement cases filed by the agency in its fiscal year 2023 are related to cryptocurrency assets.
CFTC Actively Regulates the Cryptocurrency Industry
Enhancing CFTC Regulatory Powers
The report shows that out of a total of 96 cases, the agency filed 47 lawsuits related to digital assets. Some of the more notable cases include enforcement actions taken against former FTX CEO Sam Bankman-Fried, cryptocurrency exchange Binance and its CEO Zhao Changpeng, as well as Celsius and its former CEO Alex Mashinsky. According to last year’s report, CFTC only filed 18 cases related to digital assets in the fiscal year 2022. CFTC Chairman Rostin Behnam stated in a statement:
On the other hand, according to a statement released by CFTC on October 31, the agency has awarded a total of $16 million in whistleblower rewards this year, receiving a total of 1,530 tips, the highest in history, with the vast majority related to cryptocurrencies.
In recent months, CFTC has shifted its enforcement focus to decentralized finance (DeFi). The agency filed lawsuits against three DeFi protocols, Opyn, ZeroEx, and Deridex in September 2023, accusing them of providing “illegal digital asset derivative trading services.” These three protocols ultimately reached settlements with CFTC and were ordered to pay civil penalties of $250,000, $200,000, and $100,000 respectively.
Another prominent case was CFTC winning the Ooki DAO lawsuit in June, establishing a precedent for DAOs to be held liable.
As CFTC actively intervenes in the digital asset space, U.S. lawmakers are drafting some bills aimed at “enhancing CFTC’s regulatory powers in the cryptocurrency field,” with one proposal called the “21st Century Financial Innovation and Technology Act” ready to be submitted for a vote by the full House of Representatives, led by House Republicans. They stated that the bill would address legal gaps between CFTC and the Securities and Exchange Commission (SEC).