CFTC Secures Record $17B in 2024, Boosted by Major Crypto Enforcement Actions

The U.S. Commodity Futures Trading Commission (CFTC) has announced a record-breaking $17.1 billion in monetary relief for the fiscal year 2024, largely driven by its aggressive enforcement actions in the cryptocurrency sector. This milestone includes $2.6 billion in civil monetary penalties (CMP) and $14.5 billion in disgorgement and restitution, with the majority stemming from high-profile cases involving major crypto exchanges like FTX and Binance.

FTX Case: The Largest Recovery in CFTC History

A significant portion of the CFTC’s 2024 recovery is tied to the collapse of FTX, the crypto exchange that imploded in November 2022. The agency’s legal action against FTX, which includes fraud claims against the exchange, its sister company Alameda Research, and several executives, resulted in a staggering $12.7 billion in restitution and disgorgement. This settlement represents the largest recovery for victims and sanctions in the CFTC’s history.

The CFTC’s FTX case involved the exchange’s founder Sam Bankman-Fried, who was sentenced to 25 years in prison in March 2024. Ongoing litigation continues against other key figures involved, including FTX co-founder Gary Wang, former Alameda co-CEO Caroline Ellison, and former FTX co-owner Nishad Singh.

Binance: $1.5 Billion Recovery

Following the FTX case, the CFTC also made headlines with its enforcement against Binance, the world’s largest crypto exchange. The agency secured $150 million from Binance founder Changpeng Zhao and imposed $1.35 billion in civil monetary penalties, along with a court order for the exchange to pay $1.35 billion in disgorgement. This case underscores the CFTC’s commitment to holding major industry players accountable for regulatory violations.

Additional Crypto Enforcement Actions

The CFTC’s crypto crackdown extended beyond FTX and Binance, involving several other notable cases. One such case includes the ongoing litigation against Stephen Ehrlich, the former CEO of Voyager Digital, charged with commodity pool fraud and registration failures. A federal district court recently ruled in the CFTC’s favor, denying Ehrlich’s motion to dismiss and advancing the case on key legal grounds.

Another significant case involved Seneca Ventures, which the CFTC charged with operating a fraudulent Ponzi-like scheme involving crypto derivatives and a misappropriated carbon offset program. The court granted summary judgment in favor of the CFTC, ordering the defendants to pay a total of $110.9 million in civil monetary penalties, $83.7 million in restitution, and **$36.9 million in disgorgement.

The CFTC also took action against a defendant involved in a romance scam, fraudulently misappropriating $2.3 million from customers who had intended to invest in digital asset commodities.

Protecting Consumers and Regulating Disruptive Technologies

In light of these record enforcement actions, CFTC Chairman Rostin Behnam emphasized the agency’s commitment to safeguarding customers and ensuring the integrity of markets critical to the health of the U.S. economy. He noted, "Misconduct in our jurisdictional markets is rarely confined, especially as these boundaries are continually being redefined by disruptive technology."

With its unprecedented $17.1 billion in recovery, the CFTC has once again demonstrated its resolve to regulate and protect markets in an increasingly complex and rapidly evolving crypto landscape. The agency's efforts in 2024 signal a continued crackdown on fraudulent activities and regulatory violations, ensuring that those who misuse the system are held accountable.