The Commodity Futures Trading Commission (CFTC) solidified its view that it should be a primary regulator of cryptocurrencies with a record amount of cases regarding the digital asset space in fiscal year 2023.
The agency brought 47 actions involving conduct related to digital asset commodities, representing nearly 50 percent of its 96 total enforcement actions filed during FY23, the CFTC announced in a press release Tuesday. The release included a table summary of FY23 cases brought by category.
Fifty-nine cases related to fraud charges; 12 to reporting and recordkeeping violations; and nine to failures in supervision, financial integrity, and business conduct. Of the fraud cases, 17 also included charges of failing to register, while 10 of the reporting and recordkeeping cases additionally accused firms of supervision failures.
The agency obtained more than $4.3 billion in penalties, restitution, and disgorgement in FY23, which concluded Sept. 30.
Among its digital asset cases, the CFTC lauded its high-profile enforcement actions against FTX and its founder Sam Bankman-Fried and Binance and its founder Changpeng Zhao. The Binance case included damning charges against the exchange’s former chief compliance officer, Samuel Lim, for aiding and abetting its alleged violations of the Commodity Exchange Act and CFTC regulations.
The agency also highlighted its September court win against Mirror Trading International on fraud charges that resulted in its highest civil penalty ordered in any case at $1.7 billion.
“The commission continues to remain laser-focused on stopping and deterring fraud and manipulation in the U.S.,” said CFTC Chairman Rostin Behnam in the release. “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.”
Other standout cases from the year included the agency’s role alongside the Securities and Exchange Commission in disciplining financial services firms for recordkeeping failures regarding employee use of off-channel communications for business purposes; a $45 million penalty against HSBC for alleged swaps trading manipulation; and an enforcement sweep against three large banks, including a $30 million penalty for Goldman Sachs, for swap data reporting lapses.
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