The US Commodity Futures Trading Commission (CFTC) has taken decisive action against cryptocurrency-related fraud, announcing a consent order charging New York resident Rashawn Russell with fraud. The case, one of the first under acting Chair Caroline Pham, signals the agency’s renewed focus on enforcement in the digital asset sector.
According to the CFTC’s Feb. 10 notice, Russell engaged in a fraudulent digital assets trading scheme between 2020 and 2022, soliciting investors to contribute cryptocurrency to a fund that turned out to be a scam. The agency reported that he misappropriated approximately $1.5 million through deceptive practices, ultimately pleading guilty to wire fraud in the US District Court for the Eastern District of New York.
The CFTC complaint, filed on Jan. 16, detailed how Russell misled investors by guaranteeing no losses and, in some cases, promising a minimum 25% return. The agency stated that Russell knowingly or recklessly made false statements to lure and retain investors, violating federal laws.
This enforcement action is one of the first following Pham’s Feb. 4 announcement that the CFTC would restructure its Division of Enforcement, prioritizing fraud investigations. The commission is now dividing enforcement responsibilities between two specialized task forces: one focused on retail fraud and the other on complex fraud and market manipulation.
Meanwhile, changes in financial regulatory leadership continue to shape the enforcement landscape. The CFTC elected Pham as acting chair on Jan. 20, following the inauguration of US President Donald Trump. The departure of former Chair Rostin Behnam on Feb. 7 left the commission with one vacant seat, prompting speculation about Trump’s forthcoming nominee.
During the 2024 fiscal year under Behnam, the CFTC secured more than $17 billion in monetary relief, largely stemming from enforcement actions against crypto exchange FTX. Pham’s recent policy shift suggests a move away from the regulation-by-enforcement approach that has drawn criticism from industry stakeholders.
The US Securities and Exchange Commission (SEC), another key financial regulator overseeing digital assets, also recently made significant structural changes. In January, it announced the formation of a crypto task force to develop a regulatory framework. Trump appointed SEC Commissioner Mark Uyeda as acting chair, replacing Gary Gensler, until the US Senate can confirm former commissioner Paul Atkins for the role.