On November 5, 2018, the Commodity Futures Trading Commission (“Commission” or “CFTC”) voted 4-1 to propose sweeping changes to its regulations relating to swap execution facilities (“SEFs”) and the trade execution requirement under the Commodity Exchange Act (“Act”). This article summarizes the proposed modifications to the SEF regulatory framework and trade execution requirement.
On November 15, 2018, the CFTC’s Division of Enforcement released its Annual Report for Fiscal Year 2018. This article provides an in-depth and comprehensive analysis of the Division’s FY 2018 enforcement campaign, with predictions of trends and developments for the coming year.
Over the past week, regulators in both the United Kingdom and Hong Kong have voiced words of caution regarding varying virtual assets. Both regulators were concerned in particular about the integrity of the cash markets for virtual assets and products giving retail investors both direct and indirect exposure to virtual assets.
More than $45 million in recent awards should remind businesses to proactively look within and implement effective whistleblower programs to protect themselves from potential enforcement actions.
This past week has seen two novel developments in the spoofing theories of the U.S. Commodity Futures Trading Commission. The first involves alleging that orders placed on a foreign market that were immediately canceled after the fill of an order on a U.S. exchange (and vice versa) constitute violations of the Commodity Exchange Act and CFTC regulations. The second involves allegations that a trader’s mere flashing of large orders — posting and then quickly canceling orders — without placing a genuine order on the opposite side of the market violates the CEA’s anti-disruptive trading provisions.
With the flurry of subpoenas and investigations into companies in the blockchain space that has erupted in the first eight months of this year, 2018 is on track to be "the year of the crypto investigation."
In case the intrepid and hardy souls bravely blazing entrepreneurial paths in the New World of virtual currencies do not have enough regulatory hazards to navigate, one few seem to have considered to date is the possible application of the Model State Commodity Code (“Model Code”). Depending on how its thirty-three year old provisions are interpreted, the Model Code’s prohibition on the sale of commodities for speculative or investments may possibly be applied to some virtual currency businesses.
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