CFTC FAQ on Crypto and Blockchain Technologies

March 21, 2026

On March 20, 2026, the Commodity Futures Trading Commission’s Market Participants Division (MPD) and Division of Clearing and Risk published responses to frequently asked questions regarding registrant and registered entity activities involving crypto assets and blockchain technologies. These responses provide additional clarity on topics addressed in CFTC Staff Letters 25-39 (Tokenized Collateral Guidance) and 26-05 (Staff No-Action Position Regarding Digital Assets Accepted as Margin Collateral).

The CFTC’s FAQ covers several important areas concerning the use of crypto assets and payment stablecoins by market participants in derivatives markets. It discusses whether futures commission merchants (FCMs) can use customer crypto assets, including stablecoins, to secure debit or deficit account balances. It also addresses rules for FCMs depositing their own stablecoins as residual interest in customer accounts, and clarifies restrictions on using other crypto assets like bitcoin or ether for this purpose and on investing customer funds in stablecoins.

The FAQ also examines capital charges FCMs must apply to their proprietary crypto holdings, as well as whether swap dealers may accept crypto assets as margin for uncleared swaps. For derivatives clearing organizations (DCO), it covers the conditions for accepting crypto assets as initial margin and the required haircuts to manage risks. Finally, the FAQ outlines various notification and reporting requirements.

The FAQ is reproduced in its entirety below. It can also be found here.

The article “CFTC FAQ on Crypto and Blockchain Technologies” first appeared on G. Dowd Law on March 21, 2026.

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US Seizures of Pig Butchering Proceeds from Chinese Criminals Tops $580 Million

March 9, 2026

The U.S. Attorney for the District of Columbia, Jeanine Ferris Pirro, announced that the Scam Center Strike Force has frozen and seized over $580 million in cryptocurrency. This milestone, achieved in just three months since the task force’s launch in November 2025, targets fraud linked to Chinese transnational criminal organizations (TCOs) operating scam compounds in Southeast Asia, including Burma, Cambodia, and Laos.

These groups run “pig butchering” schemes—building trust with victims via U.S. social media or texts before luring them into fake cryptocurrency investment platforms, often defrauding Americans of billions annually (estimated at nearly $10 billion per year). Many scam workers are human trafficking victims, forced to operate under armed guard.

The Strike Force, led by Assistant U.S. Attorney Karen P. Seifert and involving the DOJ’s Criminal Division (including CCIPS, Fraud, and MLARS sections), FBI, U.S. Secret Service, IRS Criminal Investigation, and partner U.S. Attorney’s Offices in Rhode Island and Western Washington, focuses on identifying key leaders and disrupting operations.

Pirro emphasized aggressive pursuit of forfeitures to return funds to victims, stating the office is “fighting like hell” to recover stolen savings from these crimes. This effort represents a major U.S. response to transnational crypto fraud exploiting everyday Americans.

The Press Release highlights U.S. Attorney Pirro’s following comments:

In November, I announced the creation of our Scam Center Strike Force to lead the charge. In only three months, we have made significant progress, freezing, seizing, and forfeiting cryptocurrency worth more than $580 million from these criminals. These criminals don’t care who you are, what you believe in, or what you ate for breakfast—all they want is to steal from good and honest Americans to line the pockets of Chinese organized crime,”

My office and our law enforcement partners around the country are taking this threat head on. Seizures of cryptocurrency is one important part of the Scam Center Strike Force’s work. Through the legal process, my Office will seek to forfeit these funds and return them to victims to the maximum extent possible. To our American victims: we are here for you, we care for you, and we will continue fighting like hell to claw back your hard-earned savings from the hands of Chinese TCOs.

The United States Attorney’s Office Press Release can be found here.

The article “US Seizures of Pig Butchering Proceeds from Chinese Criminals Tops $580 Million” first appeared on G. Dowd Law on March 9, 2026.

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FinCEN Imposes Record $80 Mio Penalty on Canaccord Genuity

March 6, 2026

FinCEN, the U.S. Treasury’s Financial Crimes Enforcement Network, has imposed an $80 million civil money penalty on Canaccord Genuity LLC, the largest BSA penalty ever levied against a broker-dealer, for willful violations of the Bank Secrecy Act.

FinCEN Director Andrea Gacki called the action a “wake-up call” to broker-dealers that fail to protect the financial system from illicit actors, emphasizing Treasury’s broader fight against fraud that harms investors and erodes market confidence.

Canaccord’s failures included maintaining an ineffective anti-money laundering (AML) program, neglecting risk-based customer due diligence, and failing to implement internal controls to detect suspicious activity. These deficiencies allowed numerous securities fraud schemes to go unreported, causing significant harm to innocent investors. The firm also onboarded high-risk customers with ties to illicit actors and neglected to file at least 160 Suspicious Activity Reports (SARs) covering dozens of over-the-counter securities and thousands of suspicious transactions.

As part of the resolution, Canaccord admitted it willfully violated the BSA by not developing a proper AML program, failing to conduct required due diligence on foreign correspondent accounts, and omitting mandatory SAR filings, thereby depriving law enforcement of critical information.

The Consent Order describes the civil penalty as follows:

FinCEN may impose a Civil Money Penalty of up $71,545 per day for willful violations of the requirement to implement and maintain an AML program. For each willful violation of the SAR reporting requirement, FinCEN may impose a civil money penalty not to exceed the greater of the amount involved in the transaction (but capped at $286,184) or $71,545. For each willful violation of the requirement to implement a risk-based due diligence program for correspondent accounts established, maintained, administered, or managed in the United States for foreign financial institutions, FinCEN may impose a civil money penalty “in an amount equal to not less than two (2) times the amount of the transaction,” but not more than $1,776,364.

After considering all the facts and circumstances, as well as the enforcement factors discussed above, FinCEN is imposing a Civil Money Penalty of $80 million in this matter. FinCEN has agreed to suspend $5 million of the Civil Money Penalty pending Canaccord’s compliance with the Undertaking set forth below, and to credit against the Civil Money Penalty payments of $20 million to the SEC and $20 million to FINRA. Accordingly, Canaccord shall make payment of $35 million to the Department of the Treasury pursuant to the payment instructions that will be transmitted to Canaccord upon execution of this Consent Order.

The FinCEN Press Release can be found here.

The FinCEN Consent Order can be found here.

The article “FinCEN Imposes Record $80 Mio Penalty on Canaccord Genuity” first appeared on G. Dowd Law on March 6, 2026.

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US Treasury Targets Crypto Mixers for Enhanced Transparency

October 22, 2023

Key Points

• FinCEN proposes to label crypto mixers as a “primary money laundering concern.”
• Initiative aims to combat misuse of Convertible Virtual Currency (CVC) mixing by illicit entities.
• Specific groups named include Hamas, Palestinian Islamic Jihad, and the Democratic People’s Republic of Korea (DPRK).
• The proposed rule will place added obligations on U.S. financial institutions.
• This is FinCEN Director Andrea Gacki’s first use of authority to target a broad transaction class for money laundering concerns.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has taken a significant step in its efforts to regulate cryptocurrency transactions. In its latest move, the agency has proposed labeling cryptocurrency mixers, which aim to obscure the sources of digital currency transactions, as a “primary money laundering concern.” This initiative is part of FinCEN’s broader strategy to enhance transparency in cryptocurrency transactions, particularly those that may be abused by terrorist groups and state-affiliated cybercriminals.

Deputy Secretary of the Treasury Wally Adeyemo emphasized the importance of this move, stating, “Today’s action underscores Treasury’s commitment to combating the exploitation of Convertible Virtual Currency mixing by a broad range of illicit actors, including state-affiliated cyber actors, cyber criminals, and terrorist groups.” Adeyemo’s statement reaffirms the Treasury’s dedication to curbing the misuse of CVC mixing globally.

The current proposed rule by FinCEN is open to public comment for a duration of 90 days. The agency’s decision to target crypto mixers comes after its identification of certain groups, such as Hamas, Palestinian Islamic Jihad, and the DPRK, who are believed to exploit these services. If this rule is finalized, it will impose a series of responsibilities on U.S. financial institutions. These institutions might have to execute additional due diligence measures or even potentially prohibit certain account types.

This decision by FinCEN is noteworthy as it signifies Director Andrea Gacki’s inaugural use of the agency’s authority to target a broad category of transactions as primary money laundering concerns. This denotes a significant shift in the government’s strategy to tackle financial crimes in the era of digital currencies.

Moreover, the Treasury Department has faced mounting pressure from lawmakers to address the potential misuse of cryptocurrencies for financing terrorism. Such concerns were magnified after reports emerged suggesting that Hamas had received cryptocurrency donations preceding its recent attack in Israel. These proposed rules align with the Treasury’s more extensive strategy, which includes recent sanctions against entities and individuals affiliated with Hamas. One such entity is a Gaza-based business suspected of facilitating Bitcoin transactions for terrorist activities.

Past actions from the Treasury against illicit finance involving crypto mixers include a National Money Laundering Risk Assessment in February 2022. This assessment highlighted an increased reliance on technologies that enhance anonymity, such as crypto mixing. Furthermore, the Office of Foreign Assets Control (OFAC) has also designated several mixing services, like Blender.io and Tornado Cash, accusing them of abetting significant financial crimes.

The consistent actions and statements from the Treasury underscore its commitment to staying abreast of the ever-evolving world of cryptocurrency. The goal is to identify and mitigate risks associated with crypto transactions, especially as malefactors continue to employ technologies like the blockchain to conceal their financial undertakings.

In conclusion, the U.S. Treasury’s efforts to label crypto mixers as a primary concern for money laundering reflect a growing awareness of the potential risks associated with cryptocurrency. As the digital currency landscape continues to evolve, so too does the government’s approach to ensuring its safe and lawful use. The proposed rule, once finalized, will mark a significant step in the journey towards a more transparent and regulated cryptocurrency environment.

The full text of the request for comments can be found here.

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CFTC Enforcement Director Provides Updated Enforcement Guidance

October 20, 2023

On October 17, 2023, Ian McGinley, the Enforcement Director at the Commodity Futures Trading Commission (CFTC), delivered a speech at the New York University School of Law Program on Corporate Compliance and Enforcement. He addressed the perception of the CFTC’s enforcement approach, emphasizing his commitment to dispelling the myth of the agency being “friendly” in this regard. Under his leadership, the CFTC filed 96 enforcement actions and obtained orders imposing over $4.3 billion in monetary relief in the fiscal year 2023 alone.

McGinley highlighted the quality of the cases brought forward, including actions against notable digital asset companies like FTX, Binance, and Celsius. He underscored the deliberate changes in enforcement actions, characterized by increased penalties, imposition of compliance monitors and consultants, and requiring admissions in settlements. These changes align with the goals of ensuring accountability and minimizing future misconduct.

The speech announced updates to the Division’s enforcement guidance, focusing on penalties, monitors and consultants, and admissions. These updates aim at enhancing the effectiveness of the CFTC in holding entities accountable and preventing future violations. McGinley emphasized the importance of deterrence, both general and specific, to discourage entities and individuals from unlawful conduct. He cited the ongoing issue of inaccurate or non-reporting of swaps by dealers, stressing the need for penalties that exceed the costs of compliance to deter such behavior.

The speech also addressed the challenge of recidivism, where entities repeatedly violate the law. McGinley outlined factors considered in assessing recidivism, including the nature of prior and current violations, time between offenses, involvement of overlapping management, pervasiveness of new misconduct, and the effectiveness of remediation efforts. The Division intends to prioritize recidivism as a significant aggravating factor, leading to increased penalties.

McGinley elaborated on the roles of Monitors and Consultants in ensuring remediation to reduce the likelihood of future misconduct. Monitors, approved by the Division, oversee and test the sufficiency of remediation, while Consultants advise entities on compliance enhancements. The imposition of Monitors and Consultants aims at ensuring that resolutions minimize the risk of recurring misconduct.

On the topic of admissions, McGinley highlighted a shift from the traditional no-admit, no-deny basis of resolutions. The Division will consider the appropriateness of admissions in every negotiation, influenced by factors like parallel criminal resolutions, conclusive evidence of misconduct, and the nature of offenses. Admissions are seen as instrumental in promoting accountability, justice, and deterrence, and facilitating post-resolution cooperation.

In conclusion, McGinley emphasized the importance of accountability and minimizing future misconduct as central objectives of the Commission and Division. He advocated for the balance between incentivizing settlements and deterring misconduct, underscoring the significant consequences for misconduct and the mitigating effects of self-reporting and cooperation. The initiatives announced are viewed as steps towards enhanced accountability and deterrence of future misconduct, contributing to the CFTC’s mission of protecting the public and preserving market integrity.

The full text of Director McGinley’s comments can be found here.

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US Fed Governor Bowman: CBDC Benefits Remain Unclear, Could Pose Significant Risks

October 17, 2023

On October 17, 2023, Federal Reserve Governor Michelle Bowman recently gave an in-depth speech on responsible innovation in money and payments at a roundtable organized by the Harvard Law School Program on International Financial Systems. Focusing primarily on digital assets such as Central Bank Digital Currencies (CBDCs), Bowman spelled out her vision for the future of financial technology, underlining the importance of a clear regulatory framework and careful examination of the benefits and drawbacks of novel financial innovations, while also noting that CBDC benefits remain unclear, and “could pose significant risks and tradeoffs for the financial system.”

CBDCs, digital forms of a nation’s currency issued and regulated by the central bank, have gained significant attention in recent years. Bowman defined a retail CBDC as a new, digital form of central bank money widely accessible to the general public, different from a “wholesale CBDC”, which is used for settling large-value transactions between banks. Discussing the prospect of a retail CBDC in the U.S., Bowman underscored the importance of addressing two key questions: what problem is being solved and if there are more efficient ways to solve it, and what features, considerations, including unintended consequences, should be taken into account.

Bowman acknowledged the varying arguments in favor of issuing a U.S. CBDC, such as enhancing the payment system, promoting financial inclusion, and providing the public with safe central bank money access. Despite this, she stated that she hasn’t yet seen a persuasive argument indicating that a U.S. CBDC could solve any of these issues more effectively or efficiently than alternatives. Moreover, Bowman voiced concerns over the potential risks and tradeoffs, especially those pertaining to disrupting the mature, well-functioning U.S. banking system.

With regard to stablecoins, Bowman noted this increasingly popular digital currency type, primarily developed for trading crypto assets, is being seen as a promising alternative to conventional payments. However, she emphasized that they’ve demonstrated to be less safe, stable, and regulated than traditional monetary forms, posing potential risks to consumers and the banking system. Therefore, the full understanding of risks and tradeoffs associated with such digital assets is pivotal.

When it comes to innovation and regulation, Bowman underlined the vision for responsible innovation within an unambiguous and logical regulatory framework. She focused on recognizing existing successes within the U.S. banking system and encouraging private sector innovations within established parameters. Stressing the principle that activities presenting the same risks should be subject to the same regulations, she calls for equal conditions for banks to compete, without compromising consumer protection.

In discussing potential advances in wholesale payments, Bowman indicated that policymakers should be cautious of the specific features that innovative wholesale platforms might comprise. Recent interest has been pointed towards platforms enabling “tokenized” forms of money, patents, and facilitation of payments through “smart contracts”. These infrastructures could ameliorate the efficiency of payment, clearing, and settlement of certain financial transactions, including cross-border transactions.

Bowman emphasized on a key question often overlooked in these conversations: where do the potential benefits derive from – new technology or changes to existing policy? While technology solutions may presuppose policy change, Bowman argued that alternatively, instead of relying on decentralized infrastructures to circumvent problems like speed and cost of payments, payments limitations can sometimes be best addressed by policy alterations rather than mere technology upgrades.

Bowman closed her address by asserting the importance of continuous research by the Federal Reserve to explore multiple options for improving payment landscapes, which include understanding technological innovations with their associated benefits, risks, and tradeoffs. Given the global nature of the financial system, international cooperation in research and careful tracking of other jurisdictions’ evolution of CBDC developments is seen as a necessity.

In conclusion, Bowman’s vision for responsible innovation aligns with the understanding of a myriad of options accessible for the enhancement of payments, including technology, the improvement of the existing payment infrastructure, and potential policy options and their implications.

The full text of US Federal Reserve Governor Bowman’s remarks can be found here.

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