5-12-2023 (LONDON) Enforcement actions against cryptocurrency firms may have reached their peak following Binance’s recent $4.3 billion settlement, as these cases provide a “template” for how companies should be governed, according to a senior U.S. regulator. The settlement between Binance and the Commodity Futures Trading Commission (CFTC) and Treasury Department, facilitated by the Justice Department, was a result of violations of U.S. anti-money laundering and sanctions laws.
Regulators in the United States have taken action against various crypto firms, including Binance, in order to establish “guardrails” and bring order and structure to the market. CFTC Commissioner Kristin Johnson shared her perspective on these cases during the FT crypto and digital assets summit, expressing her hope that the surge in enforcement actions has reached its peak. She believes that these early cases will serve as cautionary tales for firms seeking to operate successfully within the cryptocurrency ecosystem.
Johnson encouraged crypto firms to thoroughly analyze the Binance settlement as a reference for the type of governance expected by regulators in the industry. She emphasized that there is an increasingly clear blueprint for operating in this space and urged firms to take the hint.
In addition to governance, the CFTC is also focused on improving disclosures within vertically integrated crypto firms. These firms engage in various activities under one roof, and the CFTC aims to ensure that they provide comprehensive and transparent information to regulators.
