The Commodity Futures Trading Commission (CFTC) has unveiled its enforcement outcomes for Fiscal Year (FY) 2023. It highlights a historic surge in digital asset cases, actions to enforce regulatory obligations for registrants, manipulation and spoofing cases, and groundbreaking court decisions in intricate legal disputes.
The statement released by the CFTC shows that about 50% of the cases brought to its attention in 2023 involved crypto. During FY 2023, the CFTC’s Division of Enforcement (DOE) initiated 96 enforcement proceedings, alleging fraud, manipulation, and various substantial infringements across various markets, encompassing digital assets and swaps markets. These actions led to penalties, restitution, and disgorgement amounting to over $4.3 billion.
— CFTC (@CFTC) November 7, 2023
The CFTC initiated 47 actions about the behavior in the digital asset commodities sector, comprising over 49% of all cases filed during that timeframe. The actions related to digital assets encompass filing prominent complaints targeting fraudulent activities by significant exchanges and individual Ponzi schemes, achieving a legal victory against a decentralized autonomous organization and a digital asset futures platform and initiating inventive litigation related to cross-market manipulation in blockchain technology.
Chairman Rostin Behnam emphasized the CFTC’s unwavering commitment to preventing fraud and manipulation in the U.S., highlighting the Division of Enforcement’s remarkable efforts in the digital asset domain, which led to a record number of cases. He also acknowledged the staff’s dedication to ensuring accountability among registrants and market participants within CFTC-regulated markets.
The actions of the CFTC related to digital assets include suing Samuel Bankman-Fried, Gary Wang, Caroline Ellison, and Nishad Singh in two separate actions for a suspected fraudulent scheme with digital asset commodities. This led to over $8 billion in losses for FTX customer assets.
In July, CFTC charged Celsius and ex-CEO Alex Mashinsky with fraud related to a digital asset commodity pool scheme. They also charged a digital asset lending platform for unregistered commodity pool operations.