The Commodities and Futures Trading Commission (CFTC) has released its annual report for 2023, detailing a record number of enforcement actions this year — 50% of which involved crypto or digital assets.
Released on Tuesday, the CFTC’s annual results for fiscal year 2023 outlined several high-profile cases that have reverberated through the crypto industry. Charges brought against Sam Bankman-Fried, FTX, Alameda Research, and his co-conspirators received first mention in the report, followed by its case against Binance and its founder, Changpeng Zhao.
This year’s “litigation victories,” as the CFTC puts it, featured several more crypto cases. July’s complaints against Celsius and its chief exec Alex Mashinsky made the honor roll, along with charges against Avraham Eisenberg and a first-of-its-kind enforcement against Ooki DAO. Not to mention a whopping $1.7 billion civil monetary penalty (CVM) against Mirror Trading International, marking the highest CVM to ever be ordered by the CFTC.
CFTC breaks its enforcement ceiling with crypto crimes
In 2023, the CFTC managed to wrangle over $4.3 billion in penalties, restitution, and disgorgement from firms and individuals. This money stemmed from 96 enforcement actions throughout the year — its highest number to date. Of those 96 cases, 47 involved digital asset commodities.
This is in sharp contrast to the 18 crypto-related cases it brought in 2022, according to last year’s annual report, out of 82 enforcement actions overall. In total, the CFTC has increased the amount of money charged by an impressive 72%, up from $2.5 billion in penalties, restitution, and disgorgement last year.
The commission’s notable increase in crypto enforcement actions follows a promise made in February by its chief Rostin Behnam. On the back of securing increased funding for 2023, the CFTC chairman said that it would use “the full breadth of the commission’s authority” to go after crypto crime this year. It appears to have delivered on that promise — and has requested an increase of $43 million for 2024 to further tackle crypto and other financial crimes.
Also of note in 2023’s annual report is the CFTC’s whistleblower program, which it increasingly relies upon to combat crypto and digital asset fraud. The commission granted $16 million to “individuals who voluntarily provided original information that led to successful enforcement actions,” according to its report. To be eligible for an award, a whistleblower must provide new information that leads to enforcement action resulting in at least $1 million.
While it’s unclear how much money whistleblowers’ information brought in this fiscal year, the CFTC’s separate whistleblower annual report noted that it received a record 1,560 tips this year — the majority of which were crypto and digital asset related. The CFTC further noted in its latest report that since the program’s inception in 2010, it has now ordered over $3 billion in sanctions in “all whistblower-related enforcement actions.”
The CFTC’s annual reports are likely to continue highlighting digital asset fraud in the upcoming years, but it may soon be sharing the spotlight. The commission noted that two new task forces were formed this fiscal year — one to address emerging cybersecurity threats like artificial intelligence and another to tackle environment fraud in derivatives and spot markets.