The CFTC collected a record amount of $17.1 billion, mostly from cryptocurrency cases, prominently including FTX with $12.7 billion.
The U.S. Commodity Futures Trading Commission (CFTC) announced a record compensation amount of $17.1 billion in fiscal year 2024, marking a turning point in the agency's history.
This significant increase primarily comes from strong law enforcement actions targeting the cryptocurrency sector, particularly the collapse of the FTX exchange. The figure includes $2.6 billion in civil penalties and $14.5 billion in recoveries and compensations, according to the CFTC announcement on December 5.
The CFTC announced the enforcement results for 2024. Source: CFTC The fight against cryptocurrency crime.
The FTX case, the focal point of the crackdown on cryptocurrencies, accounts for a large portion of the total recovered amount, with $12.7 billion. This is considered the largest recovery for victims and the highest penalty ever imposed by the CFTC.
The lawsuit against FTX, the sister company Alameda Research, and several executives, including founder Sam Bankman-Fried, revolves around fraud allegations. The settlement requires FTX to compensate $8.7 billion and recover $4 billion. Bankman-Fried's 25-year prison sentence in March further solidifies the CFTC's determination to pursue criminal accountability for misconduct in the cryptocurrency sector.
However, the FTX lawsuit is still ongoing, targeting other defendants, including co-founder Gary Wang, former Alameda CEO Caroline Ellison, and former co-owner Nishad Singh in a separate lawsuit.
Not only FTX, the CFTC has also expanded its investigation to other cryptocurrency exchanges. In a settlement with Binance, founder and former CEO Changpeng Zhao and other executives were fined $1.35 billion in civil penalties and ordered to pay back $1.35 billion in illicit profits. Zhao himself also faced a $150 million fine.
The CFTC is also pursuing a lawsuit against the former CEO of Voyager, Stephen Ehrlich, for commodity fund fraud and violations of registration requirements. The federal district court has denied Ehrlich's motion to dismiss, supporting the CFTC on several significant legal issues. The lawsuit is still ongoing.
Another notable victory for the CFTC was identifying Seneca Ventures as a Ponzi scheme related to cryptocurrency investments, options contracts, and misappropriation of funds through a carbon offset program. The court ordered the defendants of Seneca Ventures to pay at least $110.9 million in civil penalties, $83.7 million in restitution, and $36.9 million in fraud against investors.
Additionally, the CFTC has accused an individual of using online fraud techniques to illegally obtain $2.3 million in customer funds intended for digital asset commodity trading.
The CFTC's efforts are not only focused on recovering illegal funds but also on protecting investors and maintaining market integrity. CFTC Chairman Rostin Behnam affirmed the agency's commitment to closely monitoring markets regulated by the CFTC, emphasizing the importance of this for the health of the U.S. economy.
He also noted that misconduct in this market is rarely confined to a specific area, particularly in the context of continuously evolving technology.
