CFTC Reports Record Increase in Digital Asset Cases for Fiscal Year 2023
Summary:
The U.S. Commodity Futures Trading Commission (CFTC) has reported a significant increase in digital asset cases for Fiscal Year 2023. Almost half of the cases it dealt with involved cryptocurrency. The CFTC launched 96 enforcement actions including fraud, manipulation, and major violations across various markets. This led to penalties and compensations totaling over $4.3 billion. The CFTC also undertook legal actions against prominent individuals for alleged fraudulent crypto schemes resulting in vast customer asset losses.
The Commodity Futures Trading Commission (CFTC) has publicized the results of its enforcement actions for the Fiscal Year (FY) 2023, underlining a remarkable increase in digital asset cases, prompts to adhere to regulatory demands on registrants, manipulation and spoofing charges, and unprecedented court judgments in complex litigation. According to the CFTC statement, approximately half of the cases it dealt with in 2023 were related to cryptocurrency. In FY 2023, 96 enforcement actions were initiated by the CFTC’s Division of Enforcement (DOE), alleging fraud, manipulation, and major violations in various markets including digital assets and swaps. These enforcement actions resulted in penalties, compensation, and forfeiture totaling over $4.3 billion.
During this period, the CFTC launched 47 actions regarding misconduct in the digital asset commodities sector, accounting for more than 49% of all the cases filed. Digital asset-related actions involved filing significant complaints against fraudulent activities by major exchanges, along with individual Ponzi schemes, winning a lawsuit against a decentralized autonomous organization and a digital asset futures platform, and starting groundbreaking litigation related to cross-market manipulation in blockchain technology.
Chairman Rostin Behnam underscored the unwavering resolve of the CFTC to prevent fraud and manipulation in the U.S., praising the remarkable efforts of the Division of Enforcement in the digital asset sector, resulting in a record number of cases. He also recognized the commitment of the staff to ensuring accountability among registrants and participants in markets regulated by the CFTC.
CFTC's actions related to digital assets included legal suits against Samuel Bankman-Fried, Gary Wang, Caroline Ellison, and Nishad Singh in two distinct cases for an alleged fraudulent scheme involving digital asset commodities. This resulted in losses exceeding $8 billion for FTX customer assets.
Back in July, the CFTC accused Celsius and its former CEO, Alex Mashinsky, of fraud in relation to a digital asset commodity pool scheme. They also levied charges against a digital asset lending platform for operating an unregistered commodity pool.
Published At
11/8/2023 11:46:25 AM
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