Crypto returned to the limelight of financial markets in 2023 – but for a reason less flattering than skyrocketing crypto prices.
A new report from the Commodities and Futures Trading Commission (CFTC) shows that crypto-related charges accounted for over half of the agency’s total enforcement actions this year.
Cracking Down on Crypto
In its 2023 enforcement results report, the CFTC said it “brought 47 actions involving conduct related to digital asset commodities,” accounting for over 49% of all actions during the period.
In total, the agency’s actions generated “$4.3 billion in penalties, restitution, and disgorgement” over the fiscal year.
“[The CFTC] filed high-profile complaints addressing frauds by major exchanges, individual Ponzi-schemers, and others,” wrote the agency.
One of its major actions included charges against FTX, Alameda Research, and their executives last December for a multi-billion dollar fraud against the defunct exchange’s customers. After his co-conspirators entered plea deals, the crypto empire’s boss, Sam Bankman-Fried, was found guilty of seven counts of conspiracy and fraud earlier this month and now faces a maximum of 115 years behind bars.
Another included charges against Binance and its founder, Changpeng Zhao in March for illegally operating a crypto derivatives exchange and for willfully evading CFTC regulations and commodities laws. The case is still ongoing, with Binance seeking dismissal of the case in July due to unfounded claims.
The CFTC’s Largest Civil Monetary Penalty
The CFTC also won orders requiring a $1.7 billion civil monetary penalty from a South African crypto exec – the largest in the agency’s history. The defendant, Mirror Trading CEO Cornelius Johannes Steynberg, allegedly accepted 29,421 Bitcoin (BTC) from the public as part of an “international fraudulent multilevel marketing scheme.”
The agency also successfully charged Mango Markets hacker Avraham Eisenberg for illegally obtaining $110 million from the Defi Protocol using price manipulation techniques.
“I am proud of the Division of Enforcement’s groundbreaking work in the digital asset space,” said Chairman Rostin Behnam on this year’s charges.
The Securities and Exchange Commission (SEC), the CFTC’s sister U.S. market regulator, has launched over 50 separate enforcement actions against crypto firms this year – including against FTX and Binance, as well as Coinbase.
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