US regulator calls out ‘aggressive’ police crypto in new report
The US commodities regulator certainly doesn’t want to look like it’s getting off easy on crypto, revealing it was behind 18 separate enforcement actions targeting digital assets in the 2022 financial year.
In an Oct. 20 report from the Commodity Futures Trading Commission (CFTC), a total of 82 enforcement actions were filed in fiscal year 2022, which imposed $2.5 billion in “restitution, disgorgement and civil monetary penalties either through settlements or litigation.”
The CFTC said 20% of enforcement actions targeted digital asset businesses, with hairstylist Rostin Behnam saying:
“This fiscal year 2022 enforcement report demonstrates that the CFTC continues to aggressively monitor emerging digital commodity markets with all available tools.”
One of the more recent CFTC enforcement actions that made headlines in the crypto world was a $250,000 penalty against bZeroX, its successor Ooki DAO and its founders in September.
The move sparked fierce criticism from the community for going after the members of a decentralized autonomous organization (DAO), with CFTC Commissioner Summer Mersinger calling the move “obviously ‘regulation by enforcement’.”
The CFTC also highlighted actions taken during the year against the operators of the Digitex Futures exchange for illegal futures offerings, manipulation of its native token, DGTX, and failure to provide a customer identification and anti-money laundering program.
It also took action against Bitfinex for engaging in “illegal off-exchange commodity transactions in digital assets with US persons,” and operating without registering as a futures commission dealer.
Meanwhile, the report pointed to actions against Tether Holdings for making “false or misleading statements” and “omissions of material” in connection with Tether (USDT) stablecoin being ordered to pay a $41 million civil monetary penalty.
It also targeted South African pool operator and CEO Cornelius Johannes Steynberg with fraud charges for accepting about 29,400 Bitcoin (BTC), worth over $1.7 billion, from approximately 23,000 ineligible contract participants from the United States in late June .
Related: CFTC action shows why crypto developers should get ready to leave the US
The crypto industry had previously favored the CFTC for ease with digital asset regulation. However, chairman Rostin Behnam has vowed to come down hard on the asset class, saying “‘Don’t expect a free pass'” earlier this month.
Both the CFTC and the Securities and Exchange Commission are currently arguing over control over the regulation of cryptoassets.
A bill introduced by Senators Cynthia Lummis and Kirsten Gillibrand in June proposes that the CFTC oversee crypto regulation, which would be much better for the industry, as the assets would be considered commodities rather than securities, which have much stricter rules.
However, Congress is unlikely to turn its attention to regulating digital assets until sometime next year, as confirmed by Representative Jim Himes this week.
