CFTC ends 'regulation by enforcement' under Pham

The Commodity Futures Trading Commission (CFTC) is changing its enforcement strategy, moving away from "regulation by enforcement" under the leadership of Acting Chair Caroline Pham.

Pham announced a reorganisation of the Division of Enforcement’s task forces, with a stronger focus on combating fraud and assisting victims.

This shift was announced on February 4, 2025, and is intended to make the CFTC's enforcement program more effective and efficient.

According to Pham, this restructuring aims to "stop regulation by enforcement" and prevent the punishment of "good citizens."

The CFTC believes this new structure will help to maximise resources and bring more actions against fraudsters.

The Division of Enforcement will now operate with two primary task forces: the Complex Fraud Task Force and the Retail Fraud and General Enforcement Task Force.

The Complex Fraud Task Force will handle investigations and litigations related to complex fraud and manipulation across all asset classes, led by Deputy Director Paul Hayeck.

The Retail Fraud and General Enforcement Task Force will concentrate on retail fraud and general enforcement matters, overseen by Deputy Director Charles Marvine.

"This taskforce realignment will enhance our vigorous and energetic enforcement program by empowering our talented staff to focus their expertise on matters that secure justice for victims and uphold public confidence in the integrity of our markets," acting Enforcement Director Brian Young stated.

This reorganisation is one of Pham's first major actions since becoming Acting Chair on January 20, following the departure of former Chair Rostin Behnam.

The CFTC reported over $17 billion in monetary relief in fiscal year 2024, largely from actions against the now-defunct crypto exchange FTX (CRYPTO:FTT).

The agency has also pursued enforcement actions against other crypto entities like Binance, Voyager, and Celsius.

Other regulatory bodies are also undergoing changes.

The Securities and Exchange Commission (SEC) announced the formation of a crypto task force to develop a framework for digital assets.

Pham also announced that the CFTC would hold public roundtables on market issues, including digital assets.