Fiscal 2024 was a record year in enforcement for the U.S. derivatives regulator, the Commodity Futures Trading Commission (CFTC), as it ordered US$17.1 billion in sanctions and monetary relief during the year.
The CFTC reported that it ordered US$14.5 billion in disgorgement and restitution in fiscal 2024 (ended Sept. 30), along with US$2.6 billion in monetary penalties.
The bulk of the record-setting sanctions came in a couple of landmark crypto cases involving FTX and Binance.
The CFTC settled fraud claims against FTX and Alameda Research, requiring those parties to pay US$12.7 billion in restitution and disgorgement to compensate investors who suffered losses in the collapse of FTX.
The CFTC also settled charges against Binance and a couple of executives, imposing US$2.7 billion in disgorgement and penalties against the company.
The agency reported that it brought 58 new actions during the year, which included “… precedent-setting digital asset commodities cases, its first actions addressing fraud in voluntary carbon credit markets, complex manipulation cases in various markets, and significant compliance cases,” the regulator reported.
For instance, the agency continued to bring cases against derivatives dealers for violating recordkeeping and reporting requirements. Downfalls for these dealers included failing to prevent employees from using off-channel communications for business, such as private texting. Firms also were sanctioned for widespread transaction-reporting failures and there were cases alleging market manipulation.
“Our actions in [fiscal] 2024 reflect our commitment to holding recidivist actors accountable, obtaining meaningful monetary relief and sanctions, and implementing robust remediation measures,” said Ian McGinley, director of enforcement at the CFTC, in a release.
“This was a year of large-scale, complex cases and settlements in both our traditional markets and in areas of increasing importance, such as voluntary carbon markets,” he added.
It was also a record year for the CFTC’s whistleblower program, which paid out US$42 million to 15 whistleblowers during the year.
“Enforcement actions associated with these awards resulted in monetary relief of approximately US$162 million collected,” the CFTC said.
To date, the agency has now paid out almost US$390 million in rewards to whistleblowers, in cases generating more than US$3.2 billion in monetary relief.
The program received over 1,700 whistleblower tips during the year, which was also an annual record.
The regulator also has created a new unit, the Surveillance and Enforcement Data Analytics Office. That unit brings together its existing forensic economist and market surveillance capabilities to form a single unit that will help uncover and analyze suspected misconduct.