Almost half of all the enforcement cases brought by the Commodity Futures Trading Commission in its 2023 fiscal year were related to digital assets, according to the agency's latest report.
The agency brought 47 digital asset-related actions out of 96 in total. Notable cases included those brought against former FTX CEO Sam Bankman-Fried, crypto exchange Binance and its CEO Changpeng Zhao, and Celsius and its former CEO Alex Mashinsky.
The CFTC said in 2023 that it "cemented its reputation as a premier enforcement agency in the digital assets space." In fiscal year 2022, the agency brought 18 actions related to digital assets, according to last year's report.
"The Commission continues to remain laser-focused on stopping and deterring fraud and manipulation in the U.S. I am proud of the Division of Enforcement's groundbreaking work in the digital asset space, which resulted in a record number of cases, as well as staff's dedication to holding registrants and market participants accountable for their conduct in CFTC regulated markets," CFTC Chair Rostin Behnam said in a statement.
The agency's strong push into digital assets comes as lawmakers have drafted some bills in an effort to regulate crypto, including one that is teed up for a vote in the full House that would bolster the CFTC's authority. The bill, titled the "Fit for the 21st Century Act," is being led by House Republicans who say the bill will close the gaps between the CFTC and the Securities and Exchange Commission.
Focus on DeFi
The CFTC has turned its focus to decentralized finance over the past few months. The agency charged three DeFi protocols in September — Opyn, ZeroEx and Deridex — for offering "illegal digital asset derivatives trading." The three settled the charges and were ordered to pay civil monetary penalties of $250,000, $200,000, and $100,000, respectively.
The CFTC also scored a win in a case against Ooki DAO, which set a precedent that other decentralized autonomous organizations could be held liable for legal violations as a "person."
Enforcement actions against Ooki DAO received pushback from some, including crypto investment firm Paradigm, which argued the CFTC can not hold individual DAO participants liable and has to show that they did something to violate the law.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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