As a seasoned crypto investor with a fair share of bumps and bruises from this rollercoaster ride we call the digital asset market, I can’t help but feel a mix of emotions upon hearing about the CFTC’s record-breaking $17.1 billion in monetary relief for fiscal year 2024. On one hand, it’s heartening to see that authorities are taking a stand against fraudulent activities within our industry. On the other, I can’t help but wonder if this is just another chapter in the never-ending saga of ‘Crypto: Where the Wild West Meets Wall Street’.
For the fiscal year 2024, the U.S. Commodity Futures Trading Commission (CFTC) has set a new record with $17.1 billion in financial assistance, mostly as a result of enforcement actions linked to cryptocurrency matters.
On December 5th, the Commodity Futures Trading Commission (CFTC) declared that the total financial aid provided amounted to $2.6 billion in civil monetary penalties (CMP) and a staggering $14.5 billion in disgorgement and restitution.
As an analyst, I can affirm that a significant portion of our recent progress can be attributed to the aggressive actions taken by our agency against the defunct cryptocurrency exchange, FTX, which experienced a collapse in November 2022.
In a historic move, the FTX case resulted in a record-breaking $12.7 billion compensation and penalty for wrongdoings, marking the largest reimbursement to victims and penalties ever imposed by the Commodity Futures Trading Commission (CFTC).
FTX and Binance top the CFTC’s recovery relief in 2024
The CFTC’s case against FTX involved fraud claims against the exchange, its sister firm Alameda Research, and several executives, including founder Sam Bankman-Fried. The settlement ordered $8.7 billion in restitution and $4 billion in disgorgement, making it the largest recovery in the agency’s history.
In March, Bankman-Fried received a 25-year prison sentence, and the Commodity Futures Trading Commission’s lawsuit against FTX remains ongoing, according to their statement.
The legal proceedings against other defendants such as FTX co-founder Gary Wang, Caroline Ellison who used to be the co-CEO of Alameda, and separately, Nishad Singh (formerly a co-owner of FTX), continue according to the statement.
In a lawsuit involving cryptocurrency exchange Binance, its founder Changpeng Zhao and other top officials were made to forfeit $150 million from Zhao’s personal funds and pay a total of $1.35 billion in civil fines. Additionally, the court mandated that Binance itself must repay $1.35 billion due to unjust enrichment, as noted by the Commodity Futures Trading Commission (CFTC).
Other crypto cases
In addition to notable CFTC cases involving cryptocurrencies, the organization also highlighted that it intends to bring charges against Stephen Ehrlich, a previous executive of Voyager, for alleged commodity pool fraud and failure to comply with registration requirements.
This year, the federal district court refused to dismiss the case brought against the ex-CEO, siding with the Commodity Futures Trading Commission (CFTC) on several crucial legal matters. The CFTC commented that the lawsuit continues as an active proceeding.
In simpler terms, the Commodity Futures Trading Commission (CFTC) was successful in obtaining an order that ruled in favor of them on all charges. The defendants, Seneca Ventures, were found to be operating a fraudulent investment scheme resembling a Ponzi scheme, which claimed to invest in cryptocurrencies and derivatives. Additionally, the court discovered that they had misused funds by using a carbon offset program as a means for financial misappropriation.
The court mandated that the defendants of Seneca Ventures should compensate a minimum of $110.9 million under CMP, as well as pay back $83.7 million in restitution and forfeit $36.9 million in disgorgement.
Moreover, a suspect was accused by the CFTC of employing deceptive strategies from romance scams to wrongfully divert $2.3 million that were meant for digital asset commodity trading activities.
According to the Chair of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, the commission is committed to safeguarding customers and closely monitoring markets under its jurisdiction that are essential for the well-being of the American economy. He emphasized this by stating:
“Misconduct in our jurisdictional markets is rarely confined, especially as these boundaries are continually being redefined by disruptive technology.”
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2024-12-05 11:42