The crypto market appears to not only have been beneficial to investors, traders, and regulators. In a press release uploaded recently, the United States Commodity Futures Trading Commission (CFTC) announced $17.1 billion in monetary relief for fiscal year 2024, marking the largest recovery in the agency’s history.
The press release reveals that this significant milestone was largely driven by high-profile enforcement actions targeting crypto-related cases, including the collapse of major players in the industry. The recovery includes $2.6 billion in civil monetary penalties and $14.5 billion in disgorgement and restitution.
FTX Case Lead the Charge
At the heart of the recovery lies the case against FTX, the now-defunct cryptocurrency exchange whose implosion in November 2022 sent shockwaves through the industry. The FTX case was a centerpiece of the CFTC’s enforcement activity in 2024.
Fraud allegations were brought against the exchange, its affiliated firm Alameda Research, and several of their executives, including founder Sam Bankman-Fried. Bankman-Fried, who faced numerous legal challenges following FTX’s collapse, was sentenced to 25 years in prison in March.
The FTX enforcement action alone accounted for $12.7 billion in total recovery. This case also set a new benchmark for the largest recovery for victims and sanctions in the CFTC’s history. The penalties were divided into $8.7 billion in restitution and $4 billion in disgorgement.
According to the CFTC, although they have secured significant restitution and disgorgement from the case, litigation against other FTX-related defendants, such as co-founder Gary Wang and former Alameda co-CEO Caroline Ellison, is ongoing.
Other Crypto Cases That Made It All Possible
In addition to the FTX case, the CFTC took action against other cryptocurrency entities, including Binance. The agency recovered $150 million directly from Binance’s founder and former CEO, Changpeng Zhao, alongside $1.35 billion in civil penalties and an equivalent amount in disgorgement.
Among other notable cases, the CFTC charged Voyager’s former CEO, Stephen Ehrlich, with commodity pool fraud and registration failures. The litigation is ongoing, but the agency has already secured court rulings in its favor on significant legal issues.
Another major enforcement victory involved Seneca Ventures, a Ponzi-like scheme that misappropriated funds through crypto investments and a carbon offset program. The court ordered the defendants to pay more than $230 million in combined penalties, restitution, and disgorgement.
Chairman Rostin Behnam, commenting on this historic billion-dollar recovery, noted:
Misconduct in our jurisdictional markets is rarely confined, especially as these boundaries are continually being redefined by disruptive technology. I commend our Division of Enforcement for remaining thoughtful and agile in its response to evolving markets and a growing pool of participants. Their dedication to holding accountable those who violate the Commodity Exchange Act is invaluable to the American public.
Featured image created with DALL-E, Chart from TradingView