March 27, 2024
FY 2023: CFTC's Strides in Digital Asset Cases
Latest Cryptocurrency News

CFTC Reports Surge in Digital Asset Cases and Landmark Legal Decisions in FY 2023

The United States Commodity Futures Trading Commission (CFTC) has revealed its enforcement outcomes for the fiscal year 2023, showcasing a substantial increase in cases involving digital assets, efforts to enforce regulatory obligations for registrants, cases pertaining to manipulation and spoofing, and significant court decisions in complex legal disputes.

As per the CFTC statement, approximately half of the cases addressed in 2023 involved cryptocurrencies. Throughout FY 2023, the CFTC’s Division of Enforcement (DOE) initiated 96 enforcement proceedings alleging fraud, manipulation, and other significant violations across various markets, encompassing digital assets and swaps markets. These actions resulted in penalties, restitution, and disgorgement exceeding $4.3 billion.

Within the digital asset commodities sector, the CFTC initiated 47 actions, representing over 49% of all cases during that period. The digital asset-related actions comprised complaints targeting fraudulent activities by exchanges, individual Ponzi schemes, successful litigation against a decentralized autonomous organization and a digital asset futures platform, and innovative litigation concerning cross-market manipulation using blockchain technology.

Chairman Rostin Behnam underscored the CFTC’s steadfast dedication to preventing fraud and manipulation within the U.S., praising the DOE’s exceptional efforts in the digital asset realm that led to a record number of cases. He also acknowledged the staff’s commitment to ensuring accountability among registrants and market participants in CFTC-regulated markets.

The CFTC’s actions concerning digital assets included the litigation against Sam Bankman-Fried, Gary Wang, Caroline Ellison, and Nishad Singh in two separate actions for an alleged fraudulent scheme involving digital asset commodities, resulting in over $8 billion in FTX customer asset losses.

In July, the CFTC charged Celsius and former CEO Alex Mashinsky with fraud linked to a digital asset commodity pool scheme. Additionally, it filed charges against a digital asset lending platform for unregistered commodity pool operations.

Image by freepik

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