The CFTC alleged that each of the defendants were acting as an unregistered FCM. Under Section 1a(28)(a) of the Commodity Exchange Act (the Act), 7 U.S.C. § 1(a)(28)(A), an FCM is any “individual, association, partnership, or trust that is engaged in soliciting or accepting orders for the purchase or sale of a commodity for future delivery; a security futures product; a swap . . . any commodity option authorized under section 6c of this title; or any leverage transaction authorized under section 23 of this title.” In order to be considered an FCM, that entity must also “accept[] money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom.”

The court summarized: The primary issue raised at the outset of this litigation is whether CFTC has standing to sue defendants on the theory that they have violated the CEA. Title 7 U.S.C. § 1. Presented are two questions that determine the plaintiff’s standing: (1) whether virtual currency may be regulated by the CFTC as a commodity; and (2) whether the amendments to the CEA under the Dodd-Frank Act permit the CFTC to exercise its jurisdiction over fraud that does not directly involve the sale of futures or derivative contracts.

centerpiece of the party’s investigative agenda. The SEC is expected to finalize and release a final rule in 2023, which could be instrumental in encouraging the market—and companies—to prioritize climate considerations in investments.Climate-Related Financial Risk. In late 2022, the Commodity Futures Trading Commission (CFTC) voted to release a Request for Information (RFI) to understand the public’s stance on climate-related financial risk to inform the Commission’s future actions related to the subject as pertinent to the derivatives markets and underlying commodities markets. This RFI will likely inform a proposed rule that the Commission will release this year expanding the body’s consideration of climate-related risk in the transactions it has jurisdiction over. The Commission has said that it is looking to leverage information on climate-related risk to promote responsible innovation, ensure the financial integrity of all transactions subject to the Commodity Exchange Act (CEA; 7 U.S.C. Sec 1), avoid systemic risk, craft a response to the recommendations of the Financial Stability Oversight Council’s 2021 Report on Climate-Related Financial Risk, and inform the ongoing work of the Commission’s Climate Risk Unit in the new year.Green Guides. In December of 2022, the Federal Trade Commission (FTC) announced that it is seeking public comment on proposed revisions which are set to increase consumer interest in buying environmentally friendly products to its “Green Guides for the Use of Environmental Claims” (“Green Guides”). Green Guides, which were last updated in 2012, are intended to provide guidance on environmental marketing claims. Notably, the proposed updates encompass the integrity of carbon offsets, degradable packaging claims, ozone-safe and ozone-friendly claims, and the consumer interpretation of “sustainability” and “recyclable.” Comments are due on April 24, 2023, and will be used to inform changes to the Green Guides, which are expected to be released later thi

ill become the future of corporate structure in the United States and around the world. However, one thing is clear: a DAO is not a shield simply because DAO members are able hide behind pseudonyms; anonymity is not an escape from legal responsibility. Any person establishing a DAO should proceed with caution.1 DAO is an acronym for a “decentralized autonomous organization,” where members who are holders of a native digital asset token agree to abide by the rules encoded in a blockchain-based code. A DAO a “virtual” organization embodied in computer code. Several states including Wyoming and Tennessee have adopted laws that authorize the formation of DAOs as limited liability companies.2 Commodity Futures Trading Comm’n v. Ooki DAO, No. 3:22-cv-05416-WHO, 2022 BL 454541, 2022 U.S. Dist. LEXIS 228820 (N.D. Cal. Dec. 20, 2022).3 CFTC complaint against Ooki DAO.4 See, e.g., Amicus Curiae Brief of Andreessen Horowitz Regarding Plaintiff’s Motion for Alternative Service.5 7 U.S.C. § 6(a).6 7 U.S.C. § 1(38).7 Fed. R. Civ. Proc. 17(b)(3).8 Cal. Civil. Procedure Code § 369.5(a).9 Cal. Corp. Code § 18035(a).10 Id.11 This conclusion echoes the conclusion of the U.S. Securities and Exchange Commission (“SEC”) in the DAO Report which involved the creation of a DAO by Slock.it UG which was deemed an unincorporated association that was subject to the jurisdiction of the SEC. See, e.g., Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO (Exchange Act Rel. No. 81207) (July 25, 2017) ("The DAO Report").12 According to the Revised Uniform Partnership Act that has been adopted in most states, “[A] partnership is created by the association of persons whose intent is to carry on as co-owners a business for profit, regardless of their subjective intention to be ‘partners.’” RUPA § 202 (1997). Absent a specific state legislature, a general partnership does not provide limited liability for its members.13 Cal. Corp. Code § 18105.14 “Except as otherwise provid

On October 18, 2022, the United States Court of Appeals for the Second Circuit affirmed the dismissal by the United States District Court for the Southern District of New York of a putative class action against more than twenty banks and certain brokers alleging a conspiracy to manipulate Yen-LIBOR (“LIBOR”) and Euroyen TIBOR (“TIBOR”) rates. Laydon v. Coöperatieve Rabobank U.A., et al., No. 20-3626 (2d Cir. Oct. 18, 2022). Plaintiff brought claims under the Commodity Exchange Act (“CEA”), 7 U.S.C. § 1 et seq., and the Sherman Antitrust Act, 15 U.S.C. § 1 et seq., and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962, 1964(c). The Court affirmed the district court’s order dismissing the CEA and antitrust claims and denying leave to add the RICO claims, holding that the alleged conduct was impermissibly extraterritorial under the CEA, plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws, and plaintiff failed to allege proximate causation for a RICO claim.The complaint alleged that defendants conspired to manipulate benchmark LIBOR and TIBOR rates, which reflected the interest rates at which banks could lend Japanese Yen outside of Japan. LIBOR and TIBOR rates differ in two key respects. First, TIBOR rates are set by the Japanese Bankers Association (“JBA”), while LIBOR rates are set by the British Bankers’ Association (“BBA”). Second, TIBOR rates are set at 11:0

The indictment charges the three co-founders with violating the BSA in connection with their operation of BitMEX. The indictment alleged that BitMEX was required to register as a futures commission merchant with the CFTC under the Commodity Exchange Act (CEA), 7 U.S.C. § 1. As a required CEA registrant, the indictment alleges that BitMEX was subject to the requirements of the BSA, particularly the requirement to implement and maintain an AML program. Such programs require, among other things, collecting identifying know your customer information from every customer and reporting suspicious transactions.

Nor will a “ripple effects” theory be actionable under the CEA if the chain of activity is predominantly foreign, as in Prime International and Laydon. 7 U.S.C. § 1 et seq.Laydon, 2020 WL 5077186 at *1.Id. at *2.Id. at *1.Id. at *2. 937 F.3d 94, 105 (2d. Cir. 2019).

Families of wealth need to not rely on the high fees of outside financial advisers to grow their wealth and pass it on to the next generation. But as family offices grow, so too should their securities compliance measures in order to preserve exemptions from securities regulations.[1]https://www.bloomberg.com/news/articles/2020-06-09/family-offices-to-get-greater-access-to-private-company-trades.[2]https://www.reuters.com/article/us-wealth-family/burgeoning-family-offices-manage-59-trillion-campden-idUSKCN1UB15A.[3]https://www.institutionalinvestor.com/article/b1h92fwdz574nt/Where-the-World-s-Wealthiest-Families-Are-Putting-Capital-And-Where-They-Aren-t.[4] 15 U.S.C. § 80b et seq.[5] 7 U.S.C. § 1 et seq.[6] 15 U.S.C.§78a et seq.[7] 15 U.S.C §80a et seq.[8] 15 U.S.C.§80b et seq.[View source.]

The proposed amendments provide commodity brokers with an updated framework in the event of a bankruptcy.Comments on the proposal are due on or before July 7, 2020.Clearing Requirement for SwapsAlso at its April 14 meeting, the Commission proposed amendments to codify existing Commission guidance and no-action relief from the clearing requirement of Section 2(h)(1) of the Commodity Exchange Act, 7 U.S.C. §1 et seq. (the Act), for swaps entered into by certain central banks, sovereign entities and international financial institutions. The Commission is also proposing amendments to exempt from required clearing swaps entered into by certain bank holding companies, savings and loan holding companies, and community development financial institutions.

Comments on the proposal are due on or before July 7, 2020. Clearing Requirement for Swaps Also at its April 14 meeting, the Commission proposed amendments to codify existing Commission guidance and no-action relief from the clearing requirement of Section 2(h)(1) of the Commodity Exchange Act, 7 U.S.C. §1 et seq. (the Act), for swaps entered into by certain central banks, sovereign entities and international financial institutions. The Commission is also proposing amendments to exempt from required clearing swaps entered into by certain bank holding companies, savings and loan holding companies, and community development financial institutions.