CFTC Reports Record Year for Enforcement Activities

The U.S. derivatives regulator, the Commodity Futures Trading Commission (CFTC), had a standout year in terms of enforcement in fiscal 2024, which ended on September 30, 2024. During the year, the CFTC imposed a total of $17.1 billion in sanctions and monetary relief, setting a new record.

This significant increase in enforcement was largely driven by two major crypto cases involving FTX and Binance. In these cases, the CFTC settled fraud claims against FTX and Alameda Research, resulting in $12.7 billion in restitution and disgorgement to compensate investors impacted by FTX’s collapse. Additionally, charges were settled with Binance and two executives, leading to $2.7 billion in disgorgement and penalties against the company.

Throughout the year, the CFTC brought 58 new actions, focusing on a range of areas, including digital asset commodities cases, fraud in voluntary carbon credit markets, manipulation cases, and compliance issues. These actions were part of the regulator’s commitment to holding wrongdoers accountable and obtaining meaningful monetary relief.

According to the CFTC’s director of enforcement, Ian McGinley, the agency’s efforts in fiscal 2024 reflected a dedication to pursuing recidivist actors, implementing robust remediation measures, and addressing new and emerging areas of concern like voluntary carbon markets.

This past year also marked a record year for the CFTC’s whistleblower program, which paid out $42 million to 15 whistleblowers. These actions resulted in a total of $162 million in collected monetary relief. Since the inception of the program, the CFTC has paid out nearly $390 million in rewards to whistleblowers, with cases generating upwards of $3.2 billion in monetary relief.

To enhance its surveillance and enforcement capabilities, the CFTC established a new unit, the Surveillance and Enforcement Data Analytics Office. This unit integrates forensic economists and market surveillance capabilities to better detect and analyze suspected misconduct in the markets.

Overall, fiscal 2024 was a landmark year for the CFTC in terms of enforcement efforts, reflecting the agency’s commitment to investor protection, tackling fraud, and ensuring market integrity.