Crypto will reportedly be policed by US regulators

A bill proposed by senators declared that CFTC will oversee crypto regulation

Published: Oct 21, 2022 03:39:44 PM IST

Updated: Oct 21, 2022 03:41:24 PM IST

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The United States commodities regulator is stepping up its enforcement actions against crypto assets, revealing that it was behind 18 separate actions in the 2022 fiscal year. This shows that the regulator is taking a tough stance on crypto and is not afraid to crack down on offenders.

The Commodity Futures Trading Commission (CFTC) imposed over $2.5 billion in penalties in the fiscal year 2022, according to an October 20 report. Eighty-two enforcement actions were filed, resulting in restitution, disgorgement, and civil monetary penalties through settlement or litigation.

As mentioned by CFTC, around 20 percent of CFTC's enforcement actions were against digital asset businesses, with chairman Rostin Behnam stating: “This FY 2022 enforcement report shows the CFTC continues to aggressively police new digital commodity asset markets with all of its available tools.”

The CFTC recently fined bZeroX, Ooki DAO, and their founders $250,000. This enforcement action gained notoriety in the crypto world and serves as a reminder of the need for compliance with regulatory guidelines.

The move was met with intense backlash from the public for targeting the members of a decentralised autonomous organisation (DAO). CFTC commissioner Summer Mersinger went as far as to call it a “blatant regulation by enforcement.”

During the year, the CFTC took action against the operators of the Digitex Futures exchange for manipulation of its native token DGTX, illegal futures offerings, an anti-money laundering program, and failure to provide a customer identification.

The CFTC also took legal action against Bitfinex for conducting digital asset transactions outside the exchange and operating without registering as a futures commission merchant (FCM).

Some reports highlighted action against Tether Holdings for making false or misleading statements about its Tether (USDT) stablecoin. The company was ordered to pay a civil monetary penalty of $41 million.

The crypto industry is used to getting a free pass regarding regulation. However, that may all be changing. Chairman Rostin Behnam has vowed to come down hard on digital assets, saying: “Don’t expect a free pass.” The CFTC and Securities and Exchange Commission(SEC) are vying for control over crypto asset regulation.

The CFTC could supervise crypto regulation if a bill submitted by Senators Cynthia Lummis and Kirsten Gillibrand in June goes through. It would be good news for the industry, as crypto assets would be considered commodities rather than securities with more stringent rules. Crypto assets would mean less red tape and flexibility.

Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.