CFTC attracts a record $17,1 billion in fines in 2024

What’s new? The US Commodity Futures Trading Commission (CFTC) has reported raising a record $17,1 billion in fines and restitution for fiscal year 2024, of which $2,6 billion came from civil fines and $14,5 billion was seized to be returned to affected investors.

Press release

What else is known? The record-breaking figure was achieved thanks to a lawsuit against the bankrupt crypto exchange FTX, which was the largest in CFTC history in terms of funds recovered.

Fraud by top managers at FTX and its associated hedge fund Alameda Research resulted in multi-billion dollar losses for clients. FTX founder Sam Bankman-Fried pleaded not guilty but was sentenced to 25 years in prison. His accomplices agreed to cooperate with the investigation and received much lighter sentences.

As part of the bankruptcy process, FTX was led by external receivers whose job was to restore funds to compensate victims.

FTX has entered into a settlement agreement with the former head of Alameda Research

According to it, Caroline Ellison will transfer almost all of her assets to the exchange’s clients

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The CFTC raised $12,7 billion as a result of settlements of fraud claims against FTX and Alameda: $8,7 billion in restitution and $4 billion in damages.

Also, this past year, a case was finalized against crypto exchange Binance, its founder Changpeng Zhao, and former Chief Compliance Officer Samuel Lim on charges of illegally operating a derivatives platform and willfully evading the provisions of the Commodity Exchange Act and CFTC rules.

As a result of the settlement, Zhao was fined $150 million, Lim was fined $1,5 million, and the company was ordered to pay $1,35 billion in fines and the same amount in restitution. Thus, the case against Binance brought the agency and affected customers $2,852 billion.

Binance was accused of firing an employee for reporting bribes inside the company

One of the representatives of the exchange, under the guise of providing consulting services, took fees from clients for providing preferential treatment

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It is also mentioned that the CFTC continued proceedings against the former CEO of the bankrupt crypto broker Voyager Stephen Ehrlich on charges of fraud and won the case against Seneca Ventures for organizing a Ponzi scheme.

Notably, the second US market regulator, the Securities and Exchange Commission (SEC), also attracted a record amount of fines in the outgoing year thanks to lawsuits against crypto firms.