In fiscal year 2023, the CFTC's enforcement division filed 96 enforcement actions, resulting in over $4.3 billion in penalties, restitution and disgorgement, according to a Nov. 7 announcement. Of those 96 actions, 47 involved conduct related to digital asset commodities, representing more than 49% of all actions filed during the year.
Because the CFTC currently has limited authority to regulate digital assets, Behnam said nearly all of the 47 cases the agency brought in the space were a result of people coming to CFTC and giving it tips about fraud or manipulation in the market.
The crypto market is established, and "I think we really have to be aggressive about policing it, and our enforcement docket just proves that case," Behnam said. "We have to do something about it."
Several bills have been floated in recent years to grant the CFTC additional authority to regulate the trading of digital assets that act as commodities, such as cryptocurrencies bitcoin and ether. There is still a debate as to how regulators — the Securities and Exchange Commission is the other regulator on the front lines of the U.S. crypto market — should classify smaller cryptocurrencies.
One bill to give the CFTC added power in the crypto space is the bipartisan Digital Commodities Consumer Protection Act, which was introduced last year by leaders of the Senate Agriculture Committee. However, talks over such legislation have cooled since the collapse of cryptocurrency exchange FTX in November 2022.
Of note, the CFTC in December charged the leaders of FTX and Alameda Research with fraud and material misrepresentations in connection with the sale of digital commodities in interstate commerce. The CFTC asserted that defendants' actions caused the loss of over $8 billion in FTX customer deposits.