Rostin Behnam, the chair of the United States Commodity Futures Trading Commission (CFTC), anticipates that regulators in the country will continue to take strict measures against cryptocurrency firms as long as there is investor interest in the market.
During his speech at the 2024 Global Conference on May 6, Behnam acknowledged that despite the negative events of 2022, which resulted in a market downturn and several companies going bankrupt, the crypto market continues to thrive and attract investors and entrepreneurs. While he did not specify whether it would be the CFTC or the Securities and Exchange Commission (SEC) taking enforcement actions to protect investors, both regulatory bodies have ongoing lawsuits against numerous crypto firms.
Behnam stated that he expects to witness another wave of enforcement actions within the next 6 to 18 months, or 6 to 24 months, due to the current cycle of asset appreciation and the interest shown by retail investors. He emphasized the importance of having a regulatory framework, transparency, and the necessary tools to combat fraud and manipulation in the market.
Behnam agreed with a moderator that bringing crypto firms into the regulatory framework through legislation was the appropriate course of action. Members of the House of Representatives are currently awaiting a floor vote on legislation that aims to clarify the roles of the SEC and CFTC regarding digital assets, which was approved by the committee in July 2023.
According to a report by Cornerstone Research released in January, the SEC brought the highest number of crypto-related enforcement cases in 2023 since 2013. The regulator currently has pending cases against US crypto firms such as Kraken, Binance, and Coinbase. On May 4, Robinhood Crypto received a Wells notice, which typically precedes an enforcement action.
In October, Behnam mentioned that around one-third of all enforcement actions taken by the CFTC against crypto firms occurred in 2023. In November, the CFTC reported that it had initiated 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 US authorities in November.
US enforcement agencies are intensifying their efforts to combat crypto-related crimes, as evidenced by their actions against various firms in the industry.