The United States, the Commodity Futures Trading Commission, or CFTC, has released its FY 2023 (Fiscal Year 2023) budget request for $365 million. This is an increase of 9.9% over the previous year and 20% over FY 2021. The Commission regulates the derivatives market in the country and in recent years has been increasingly active in controlling financial products containing cryptocurrencies.
According to the agency’s request document, the CFTC is focusing on the risks associated with managing digital assets, ensuring secure custody and accounting. The agency has a CPA staff due to a lack of guidance on digital wealth accounting from industry watchdogs. In addition, the agency ensures that derivatives clearinghouses “use robust segregation of duties processes and procedures to protect against security theft of their employees” and has comprehensive plans to increase training efforts.
The request turned out to be more modest than Commissioner Rustin Behnam had hoped. In February, he told the Senate Agriculture Committee that his agency needed an additional $100 million and more authority to regulate bitcoin (BTC) and ethereum (ETH), two cryptocurrencies the government treats as commodities.
The CFTC now relies heavily on whistle-blowers for its enforcement work. Behnam told an audience of the Futures Industry Association this month that the agency has received more than 600 tips since October, with “a large number of them related to cryptocurrency scams such as dumping schemes, refusal to comply with withdrawal requests.” and romantic scams. On March 18, the agency announced an ultimatum price of $10 million.
It is likely that the agency will gain more power in the digital asset space. Senators Cynthia Loomis and Kristen Gillibrand noted that their cryptocurrency regulation bill, when presented, will include an important role for the CFTC, and a recent Government Accountability Office (GAO) report commented on the agency’s limited powers.
The president’s fiscal year 2023 budget, announced Monday, projects $11 billion in revenue over the next decade from digital asset rule updates.