The US Commodity Futures Trading Commission (CFTC) has released its budget request for fiscal year 2023 (FY2023), requesting $365 million. This represents an increase of 9.9% compared to the previous year and 20% compared to fiscal year 2021. The commission regulates the country’s derivatives market and has been increasingly active in recent years in the surveillance of financial products. that incorporate cryptocurrencies.
According to the agency’s application document, the CTFC focuses on the risk of digital asset custodians, ensuring secure storage, as well as accounting. The agency has its own staff of certified public accountants due to a lack of guidance on digital asset accounting from industry watchdogs. In addition, the agency ensures that derivatives settlement organizations “employ robust separation of duties processes and procedures to safeguard against theft of derivative collateral.” [sus] employees,” and has extensive plans to increase educational efforts.
The request was more modest than Commissioner Rostin Behnam had requested. In February he told the Senate Agriculture Committee that his agency needed an additional $100 million and additional authority to regulate Bitcoin (BTC) and Ethereum (ETH), cryptocurrencies the government treats as commodities.
The CFTC now relies heavily on whistleblowers in its enforcement efforts. Behnam told a Futures Industry Association hearing this month that the agency had received more than 600 tips since October, of which “a large number allege cryptocurrency fraud, such as pump and dump schemes, refusals to honor withdrawal requests of money and romance scams. The agency announced a $10 million prize for whistleblowers on March 18.
It seems likely that the agency will receive more authority in the realm of digital assets. Senators Cynthia Lummis and Kristen Gillibrand have indicated that their crypto regulation bill, when introduced, will include a prominent role for the CFTC, with a recent Government Accountability Office (GAO) report commenting on the limited authority from the agency.
The president’s fiscal year 2023 budget, announced Monday, envisions generating $11 billion in revenue over the next decade by modernizing the rules surrounding digital assets.
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