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2 New Cases Showcase CFTC Spoofing Theories
by: Katherine Cooper , Elizabeth Lan Davis | Law 360 | (09/25/2018)
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.
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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."
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Virtual Currencies and the Model State Commodity Code
by: Katherine Cooper | Blockchain Law Center | (08/21/2018)
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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Proposed Swap Dealer Requirements: The CFTC's Long Path Towards a More Risk-based Approach
by: Katherine Cooper | The Review of Securities & Commodities Regulation (Subscription Required) | (08/15/2018)
The CFTC’s proposed minimum capital requirements for SDs and MSPs have met with criticism from industry on a variety of points. These include the use of initial margin, reliance on notional amounts, effect on smaller SDs, inconsistency with the SEC’s proposed capital rule, duplicative reviews for internal capital models, and reporting requirements.
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NFA’s Proposed Disclosure Requirements for Futures Registrants Engaging in Virtual Currency Activities Goes into Effect July 30, 2018
by: Katherine Cooper | Blockchain Law Center | (07/30/2018)
Concerned that virtual currencies and related products “may be attracting customers that do not fully understand their nature, the substantial risk of loss that could arise from trading them and the limitations of NFA’s oversight role,” the National Futures Association (“NFA”) is implementing new disclosure requirements for NFA Members engaging in virtual currency activities with customers.
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Compliance and Enforcement Implications of the CFTC's Virtual Currency Derivative Product Listings Advisory
by: Elizabeth Lan Davis | Blockchain Law Center | (05/23/2018)
The CFTC's Division of Market Oversight and Division of Clearing and Risk recently issued an advisory providing guidance to exchanges and clearinghouses regarding virtual currency derivatives to be listed or cleared. Entities already listing or clearing virtual currency derivatives, as well as those considering doing so, should be aware of the compliance and enforcement implications stemming from the advisory.
Other Recent Items
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Derivatives and Futures Law Committee Virtual Winter Meeting 2021
01/28/2021 | (01/11/2021)
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CFTC Digital Assets Primer Overview
Blockchain Law Center | (12/23/2020)
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Recently issued guidance in interpreting self-reporting and cooperation in CFTC enforcement orders
Commodity Corner | (10/29/2020)
To view Murphy & McGonigle’s Commodities, Futures & Derivatives practice, please click here.