On November 22, 2017, the Division of Enforcement (“Division”) of the Commodity Futures Trading Commission (“CFTC”) released its annual enforcement results, announcing that it had filed 49 enforcement actions for Fiscal Year 2017.  Despite the unexpected decrease to the CFTC’s budget, the agency’s enforcement program is on pace to markedly improve upon the number of filings made during Fiscal Year 2017. Since announcing the results, the Division has filed 29 actions thus far in Fiscal Year 2018.

On March 6, 2018, in a decision on the CFTC’s motion for a preliminary injunction and the pro se defendant’s motion to dismiss, United States District Court Judge Jack Weinstein in the Eastern District of New York ruled that virtual currencies are “commodities” as that term is used in the Commodity Exchange Act and CFTC Regulations.  Moreover, the court confirmed that a provision added to the CEA by the Dodd Frank Act, and regulations promulgated thereafter, provide the CFTC with jurisdiction over fraudulent transactions in the cash market for virtual currency even if the activity does not involve a futures or swap trade.

If you are a Commodity Pool Operator (“CPO”) or Commodity Trading Advisor (“CTA”) and you have not made strides to put an effective Information Systems Security Program (“ISSP”) in place, doing so should be blinking red on your dashboard.

Enforcement Defense Update: The Department of Justice (DoJ) today announced fines totaling $5.6 billion against five of the world’s largest banks related to the banks’ alleged manipulation of the foreign exchange markets (“forex”). The settlements are notable for a number of reasons; in particular, the settlements highlight the strong position the DoJ appears to be taking with respect to enforcement declinations and recidivism.