CFTC recoups $1.3 billion, calls crypto policing major goal

The Commodity Futures Trading Commission’s Enforcement Division paid for itself four times over in fiscal year 2019. In fact, the $205 million in fines it assessed covered 80% of the agency’s $249 million total budget.

The division also said policing digital assets had become one of its main goals.

While it didn’t break down how much of that came from cryptocurrency and digital assets cases, it did highlight several, including the Control-Finance pyramid scheme. More than 1,000 people “invested” nearly 23,000 bitcoins (BTC)—then worth about $147 million, in that case. They were promised up to a 45% annual return as well as a “safe haven” from bitcoin volatility.

In all, the Enforcement Division pulled in $1.3 billion in FY 2019. That was its best showing in four years, and 39% more than in FY 2018. The agency sent $1.1 billion of it back to investors who had victims of fraud and other crimes.

“The [Enforcement] Division also continued to track down fraudsters as they entered new markets—and sometimes entirely new asset classes, like digital assets— seeking to use new products or new technologies to target unsuspecting customers,” said the division’s FY2019 annual report. “Through all of this, we have worked hard to ensure that we are keeping pace with these new technologies, and staying one step ahead of the bad actors.”

Beyond that, in FY 2019 more criminal charges were filed at the same time as CFTC lawsuits than ever before, it said in a release issued with the report on Nov. 25.

Former CFTC Chairman and “Crypto Dad” J. Christopher Giancarlo

Which isn’t to say that the agency as a whole went after cryptocurrency companies. Until July, it was led by Commission Chair J. Christopher Giancarlo. He became known as Crypto Dad after telling the Senate to embrace cryptocurrencies rather than try and hold off a financial product that may be inevitable.

Since his departure, Giancarlo has joined the board of the American Financial Exchange, which is seeking to replace a key financial index—LIBOR—with an Ethereum-based product. He also joined a blockchain advocacy group, the Chamber of Digital Commerce.

So far, things look promising under his replacement, CFTC Chairman Heath Tarbert. He made a splash at an October trade show, when he announced from the stage that he believed that ether (ETH) had joined bitcoin (BTC) in having transitioned from security to commodity. It was taken as a big win for the second-largest cryptocurrency.

Featured image: Marco Verch via Flickr, CC BY 2.0