Cryptocurrency

No way to police all cryptocurrency fraud, CFTC commissioner says

A top U.S. regulator said on Tuesday there is no way to police all cryptocurrency fraud because there is so much, though her agency is working on several big cases.

Christy Goldsmith Romero, one of five commissioners at the Commodity Futures Trading Commission (CFTC), said cryptocurrency cases account for about 20% of the agency’s portfolio, including recent civil cases against the exchanges Binance and FTX.

“There’s just a lot of fraud in the space,” Goldsmith Romero said at a white collar crime conference at the New York City Bar Association. “There’s just no way we can police all the fraud, but we’ve got to do something.”

CFTC Chairman Rostin Behnam has sought greater authority from lawmakers for the agency to oversee spot crypto markets.

Goldsmith Romero pushed back on the idea there was a “turf war” between the CFTC and the Securities and Exchange Commission over regulating crypto, but acknowledged that many of the industry’s products are new and the agencies were “still trying to figure it out.”

She also said crypto companies should not view the CFTC as a potentially friendlier regulator than the deeper-pocketed SEC.

“I don’t like the idea that somehow the CFTC is light touch,” Goldsmith Romero said. “‘Light touch regulator’ would never be written on my tombstone.”

In March, the CFTC sued Binance and Changpeng Zhao, its founder and CEO, for allegedly operating a sham compliance program.

Zhao has called the complaint an “incomplete recitation of facts.”

The CFTC case against now-bankrupt FTX accuses the exchange and founder Sam Bankman-Fried of causing the loss of more than $8 billion in customer deposits.

Bankman-Fried has pleaded not guilty to related criminal charges from the U.S. Department of Justice.