CFTC Chair predicts increased enforcement actions against crypto firms in the next 2 years

Rostin Behnam, the chair of the United States Commodity Futures Trading Commission (CFTC), predicts that regulators in the country will continue to take strict action against cryptocurrency firms as long as the market remains attractive to investors. Speaking at the 2024 Global Conference on May 6, Behnam acknowledged the negative events that occurred in 2022, which led to a market downturn and the bankruptcy of several companies. However, he noted that the crypto market continues to grow and draw interest from investors and entrepreneurs. While Behnam did not explicitly mention whether the CFTC or Securities and Exchange Commission (SEC) would be responsible for enforcing actions to protect investors, both regulatory bodies have ongoing lawsuits against numerous crypto firms. Behnam suggested that without proper regulation, transparency, and tools, fraud and manipulation would persist. He agreed with a moderator that bringing crypto firms into the regulatory framework through legislation would be the appropriate course of action and revealed that members of the House of Representatives are awaiting a floor vote on a bill that would clarify the roles of the SEC and CFTC in overseeing digital assets. A report by Cornerstone Research released in January stated that the number of crypto-related enforcement cases by the SEC in 2023 was the highest since 2013. The SEC currently has pending cases against U.S. crypto firms, including Kraken, Binance, and Coinbase. They also issued a Wells notice, a precursor to an enforcement action, to Robinhood Crypto in early May. Behnam previously mentioned in October that approximately one-third of all enforcement actions taken by the CFTC against crypto firms occurred in 2023. The CFTC reported in November that it had initiated 47 actions in the digital asset commodities sector, including cases against former FTX CEO Sam Bankman-Fried and former Celsius CEO Alex Mashinsky. Additionally, the Commission was involved in the $4.3 billion settlement between Binance and U.S. authorities in November. The increased focus on crypto-related crime by U.S. enforcement agencies is highlighted in this article.