The Commodity Futures Trading Commission (CFTC) chair Rostin Behnam labeled the regulator as the premier enforcement agency as it pursues crooks in the digital assets industry. The chair issued the comments hailing the regulator for hitting more fraudulent crypto projects with enforcement actions.
Behnam revealed in the Tuesday, November 7 announcement that its enforcement results realized record numbers involving various parties across the digital asset space.
CFTC Hits Record Figures in Enforcements During 2023 Fiscal Year
CFTC chair Behnam outlined that the regulator had in the 2023 fiscal year enforced 47 actions involving digital asset commodities. The figures represent 49% of the total actions enforced by CFTC and earned $4.3 billion in penalties, disgorgement, and restitution.
The regulator’s statement read that CFTC had in 2023 affirmed the reputation of a premier enforcement agency within the US digital asset space. The chair lauded the input of the regulator to reign in emergent crooks in the crypto exchange.
Behman recalled that the biggest actions involved the charges brought against the bankrupt FTX and the deposed co-founder Sam Bankman-Fried. The charges extended to the FTX trading firm Alameda Research, which Caroline Ellison led.
The CFTC chair recounted the allegations the regulator initiated against the largest global crypto exchange, Binance, and its chief executive, Changpeng Zhao. Also, the regulator initiated charges against the bankrupt crypto lending firm Celsius Network and ex-boss Alex Mashinsky.
SEC Faulted for Confusion and Inability to Regulate Digital Assets Ecosystem
CFTC’s statement captures an indirect criticism of the US Securities and Exchange Commission (SEC) chaired by Gary Gensler for its shortcomings. The securities watchdog chair has, in past appearances in Congressional hearings, seen the agency’s capability to regulate the digital assets industry questioned.
The SEC chair’s appearance before the Congress House Financial Services Committee turned into a blasting session alleging loyalty to the huge banks. Representative Patrick McHenry, who then served as the interim speaker, hardly held back in the September 27 hearing.
Representative McHenry labeled SEC’s and Gensler’s efforts as targeted at choking off the cryptocurrency ecosystem. The interim speaker accused the chair of orchestrating confusion and irreparable damage with the enforcement actions as witnessed in its losing streak in lawsuits.
The CFTC, though noncommittal of attacking the SEC, appeared to recount the recent court directive to the SEC for it to review the bid by Grayscale Investment to convert the Bitcoin Trust (GBTC) into the spot Bitcoin exchange-traded fund (ETF). SEC was found to continually decline Grayscale’s application, forcing the asset manager to sue the regulator for review. The federal judge profiled SEC’s repeated rejections as both arbitrary and capricious.
Brian Quintenz, who now serves as a16z partner, questioned the ongoing regulatory land grab exhibited by both SEC and former employer CFTC. The former commissioner at the latter urged the need for the regulators to prioritize the formulation of a clear crypto-specific framework.
CFTC Action Against DeFi Protocols Settled
The Tuesday statement by CFTC acknowledged that weeding out crooks in the crypto industry extends to scrutiny of the decentralized finance (DeFi) protocols. CFTC acknowledged filing charges against several DeFi protocols.
CFTC recalled initiating actions against three DeFi protocols, including Opyn, ZeroEx, and Deridex, for allegedly illegal offering. The protocols engaged in prohibited leveraged and margin transactions involving retail commodities in cryptocurrency assets. However, CFTC confirmed each DeFi project settled with the regulator.
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