Rostin Behnam, the chair of the United States Commodity Futures Trading Commission (CFTC), anticipates that regulators will continue to take action against cryptocurrency firms as long as the market remains attractive to investors. Speaking at the 2024 Global Conference on May 6, Behnam acknowledged that despite negative events in 2022 that caused market decline and bankruptcies, the crypto market continues to expand and attract investors and entrepreneurs. While he did not explicitly state whether the CFTC or the Securities and Exchange Commission (SEC) would be responsible for enforcing actions to safeguard investors, both agencies currently have ongoing lawsuits against several crypto firms.
Behnam expressed his belief that there will likely be another round of enforcement actions within the next 6 to 18 months, or 6 to 24 months, due to the increasing value of assets and the interest of retail investors. He emphasized the importance of having a regulatory framework, transparency, and the tools typically used by regulators to combat fraud and manipulation.
Behnam agreed with a moderator that bringing crypto firms into the regulatory framework through U.S. legislation is the appropriate course of action. Members of the House of Representatives are awaiting a floor vote on legislation that could clarify the roles of the SEC and CFTC in relation to digital assets, which advanced out of committee in July 2023.
According to a January report by Cornerstone Research, the number of crypto-related enforcement cases initiated by the SEC in 2023 was the highest since 2013. The SEC currently has pending cases against U.S. crypto firms such as Kraken, Binance, and Coinbase, and issued a Wells notice, typically a precursor to an enforcement action, to Robinhood Crypto on May 4.
In October, Behnam stated that approximately one-third of all enforcement actions taken by the CFTC against crypto firms occurred in 2023. In November, the CFTC reported initiating 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.
US enforcement agencies are intensifying efforts to combat crypto-related crimes, as evidenced by their actions and ongoing investigations.