NEW YORK—The variety of instances of alleged digital asset fraud and manipulation continues to speed up, the pinnacle of the Commodity Futures Buying and selling Fee mentioned.
“Headlines concerning the lack of tens of hundreds of thousands of {dollars} in digital belongings on account of protocol exploits, phishing assaults, preying on susceptible individuals and different fraudulent and manipulative schemes have develop into far too frequent,” CFTC Chairman
Rostin Behnam
mentioned Wednesday in a video message delivered at a crypto business convention in New York.
“Current world conflicts have highlighted the flexibility for digital belongings to be a instrument for many who current dangers to the broader American financial system, the general public and our lifestyle,” he added.
The derivatives markets regulator has filed greater than 50 enforcement actions associated to digital asset exercise since 2015, and greater than half of these instances concerned allegations of fraud, Mr. Behnam mentioned within the message to the convention hosted by blockchain information platform Chainalysis Inc. Twenty-three of these crypto-related instances had been filed throughout the final fiscal yr, he added.
About two-thirds of the overall variety of crypto-related fraud enforcement actions had been introduced prior to now 2½ years, Mr. Behnam mentioned.
The CFTC chairman final October cited two enforcement actions totaling $140 million in penalties, including that these had been solely the “tip of the iceberg.”
Mr. Behnam’s newest remarks come because the crypto market noticed one other wave of volatility in latest weeks. Cryptocurrency TerraUSD and its sister stablecoin, Luna, crashed final week, saddling buyers with billions of {dollars} in losses.
Mr. Behnam mentioned the CFTC appears to be like to prioritize using its current authority to discourage and fight fraud and manipulation within the crypto markets and can proceed so as to add assets on this space, together with utilizing instruments to assist its enforcement efforts.
The CFTC chief requested lawmakers in February to grant his company authority to manage cryptocurrencies corresponding to bitcoin, saying the “speculative fervor” round such belongings left buyers in want of safety.
Mr. Behnam on Wednesday additionally known as on crypto business contributors to help regulatory obligations and to work collectively to establish and cease dangerous actors earlier than fraud and manipulation happen.
“I additionally name on everybody right here at the moment to proceed to advocate and help regulatory obligations that can make these markets extra clear, safer and resilient,” he mentioned. “I’ve mentioned many instances, the crypto markets current distinctive traits that may profit from the federal market oversight.”
Write to Mengqi Solar at mengqi.solar@wsj.com
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