Top executives from Coinbase, Ripple, Circle, Moonpay and Crypto.com have been invited to a CEO Forum that will discuss launching a pilot program for digital asset markets, according to the press release from the Commodity Futures Trading Commission (CFTC). The focus of the program will be on tokenized non-cash collateral, such as stablecoins.
Acting chair Caroline Pham said in a statement: “The CFTC is committed to responsible innovation. I look forward to engaging with market participants to deliver on the Trump Administration’s promise of ensuring that America leads the way on economic opportunity.”
Proposed programs
Pham has previously proposed a CFTC pilot program as a US regulatory sandbox to provide regulatory clarity and frameworks for digital asset markets and ensure guardrails are in place.
And the CFTC’s Global Markets Advisory Committee, which Pham sponsors, released a recommendation last year through its Digital Asset Markets Subcommittee, emphasizing the potential to expand the use of non-cash collateral, and recommending the use of distributed ledger technology to facilitate the expansion.
As soon as she became interim chair of the agency, Pham announced the launch of public roundtables on innovation and market structure. The roundtables will tackle issues such as affiliated entities and conflicts of interest, prediction markets, and digital assets.
Each of these efforts reflects the agency’s invigorated efforts to integrate digital asset innovations into the traditional market structure while maintaining clearer regulatory oversight.
Legacy crypto case
The agency just announced that the US District Court for the Eastern District of New York entered an order against Rashawn Russell. It is part of a CFTC action charging Russell with fraudulent solicitation and misappropriation of investor assets obtained for the purported purpose of trading digital assets on behalf of customers.
The order requires Russell to pay over $1.5m in restitution to defrauded victims and permanently enjoins him from engaging in conduct that violated the Commodity Exchange Act and CFTC regulations. It also permanently bans him from registering with the CFTC and from solicitation for and trading in any CFTC-regulated markets on behalf of third parties, and bans him from trading for himself for a period of eight years.
The order, stemming from a CFTC complaint filed in April 2023, alleges that from November 2020 to August 2022 Russell engaged in a fraudulent digital assets trading scheme in which he solicited more than two dozen retail customers to contribute bitcoin, ether, and fiat currency to invest in his purported proprietary digital assets trading fund.
False promise
The order further says Russell intentionally and/or recklessly made false and misleading statements regarding the fund’s structure, size, and performance to obtain and retain investors; failed to trade the money and assets as represented; and, falsely promised to pay withdrawal requests. And the order alleges that Russell misappropriated over $1.5m in customers’ assets through his fraudulent scheme, which he used, among other things, to pay personal expenses, entities associated with gambling activities, and Ponzi-like payments to current customers.
Russell has also pleaded guilty to one count of wire fraud stemming from the same trading scheme alleged in the CFTC’s complaint in a parallel criminal action. He also pled guilty to one count of access device fraud from unrelated conduct, with prosecutors alleging Russell had fraudulently obtained more than 15 credit cards and other access devices in the names of third parties to complete unauthorized transactions.
Russell was sentenced to over three years in prison and an additional term of three years of supervised release, on top of the above-mentioned $1.5m in restitution to the victims of his trading scheme.
