Category Archives: Commodity Futures Trading Commission (CFTC)

DOJ Announces Policy Ending “Regulation by Prosecution” of Digital Assets

by Joel Cohen, Brent Wible, Ladan Stewart, Marietou Diouf, Robert Denault, and Elisha Mvundura 

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Top left to right: Joel Cohen, Brent Wible and Ladan Stewart, Bottom left to right: Marietou Diouf, Robert Denault and Elisha Mvundura (Photos courtesy of White & Case LLP).

On April 7, 2025, Deputy Attorney General Todd Blanche issued a memorandum instructing federal prosecutors to cease pursuing “litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets,” noting that regulators and not prosecutors will “do this work outside the punitive criminal justice framework.”[1]  Under the new policy, the Justice Department will prioritize investigations and prosecutions involving individuals who defraud investors in digital assets or who use digital assets in furtherance of other crimes, including offenses related to terrorism, narcotics trafficking, human trafficking, organized crime, hacking, and cartel and gang financing.  The memorandum indicates that the Justice Department plans to close all ongoing investigations that are inconsistent with the new policy.

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SEC Staff Clarifies That Meme Coins Are Not Securities

by Jenny Cieplak, Zachary Fallon, Ghaith Mahmood, Yvette D. Valdez, Stephen P. Wink, and Deric Behar

Photos of authors.

Top left to right: Jenny Cieplak, Zachary Fallon, and Ghaith Mahmood. Bottom left to right: Yvette D. Valdez, Stephen P. Wink, and Deric Behar. (Photos courtesy of Latham & Watkins LLP)

The Staff stated that most meme coins are not subject to federal securities laws or SEC fraud enforcement; who will oversee meme coins remains an open question.

On February 27, 2025, the Securities and Exchange Commission’s (SEC’s) Division of Corporation Finance published a Staff Statement on Meme Coins (the Statement). The Statement is the first tangible clarification of how the federal securities laws apply to a specific category of crypto since President Trump issued an executive order on digital assets (for more information, see this Latham blog post) and the SEC established a Crypto Task Force (for more information, see this Latham blog post). The Statement is responsive to the Crypto Task Force’s first priority (as highlighted by SEC Commissioner Hester Peirce, who leads the task force): determining the status of digital assets under the securities laws.

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Cryptocurrency Exchange KuCoin Pleads Guilty to Unlicensed Money Transmission, Agrees to Pay More Than $297.4 Million in Criminal Forfeiture, Fine

by Jonathan J. Rusch

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Photo courtesy of the author

For more than a decade, as part of its oversight of financial institutions’ compliance with the Bank Secrecy Act (BSA) and regulations thereunder, the Financial Crimes Enforcement Network (FinCEN) has repeatedly stated that any person accepting and transmitting convertible virtual currencies (“cryptocurrencies”) must register with FinCEN as money transmitters and thereafter comply with the anti-money laundering/counter-terrorism financing program, recordkeeping, and reporting requirements.[1]  Even so, a number of cryptocurrency or virtual currency businesses have ignored these longstanding requirements, sometimes resulting in massive criminal and civil penalties.[2]

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Use of Artificial Intelligence in CFTC-Regulated Markets

by Marc Gilman

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Photo courtesy of the author

On December 5, 2024, the U.S. Commodity Futures Trading Commission (the “CFTC,” or the “Commission”) staff issued an advisory related to the use of artificial intelligence (“AI”) by CFTC-registered entities and registrants (the “Advisory”). In tandem, two CFTC representatives – Chairman Rostin Behnam and Commissioner Kristin N. Johnson – released statements supporting the Advisory and offering thoughts about the current and future implications of AI on CFTC registrants. This blog post will summarize the contents of the Advisory as well as the related statements of the CFTC representatives to collect a set of practical considerations for designing CFTC compliance programs to meet evolving regulatory expectations for the use of AI. 

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Major Takeaways from the CFTC Whistleblower Program’s 2024 Annual Report

by Andrew Feller and Geoff Schweller

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Andrew Feller and Geoff Schweller (photos courtesy of Kohn, Kohn & Colapinto, LLP)

On November 15, the U.S. Commodity Futures Trading Commission (CFTC) released its annual report on its Whistleblower Program and Customer Education Initiatives for the 2024 fiscal year. Since it was established in 2010, the CFTC Whistleblower Program, which offers anonymous reporting channels and monetary awards to commodities whistleblowers, has grown into a critical piece of the CFTC’s enforcement arsenal.

The report details what was a record year for the CFTC Whistleblower Program, with the highest-ever number of both whistleblower tips and award applications received and the most award orders issued in a single fiscal year. Ironically, however, due to its growth and success, the program faces a funding crisis threatening to undermine the program.

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CFTC Begins Its Enforcement of NDA Rule with Action Against Trafigura

by Benjamin Calitri

Benjamin Calitri

Photo courtesy of the author

On June 17, 2024, Trafigura Trading LLC (“Trafigura”) agreed to pay $55 million to settle charges brought by the Commodity Futures Trading Commission (“CFTC”) that they “traded gasoline while in knowing possession of material nonpublic information, . . . manipulated a fuel oil benchmark to benefit its futures and swaps positions,” and notably that they violated CFTC Regulation 165.19(b) by “requir[ing] its employees to sign employment agreements, and request[ing] that former employees sign separation agreements containing non-disclosure provisions prohibiting them from disclosing company information, with no exception for law enforcement agencies or regulators.” This is the CFTC’s first enforcement of Regulation 165.19(b).

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Consumer Financial Protection Bureau Stands Up to Protect Whistleblowers from Overly Broad NDAs

by Benjamin Calitri

Benjamin Calitri

Photo courtesy of author

Protections for whistleblowers from overly expansive non-disclosure agreements (NDAs) aimed at preventing whistleblowers from providing information to law enforcement and regulators have been expanding exponentially in the past year. The Securities and Exchange Commission’s (SEC) enforcement of Rule 21F-17(a) has gained teeth by increasing the monetary sanctions for enforcement. The Commodity Futures Trading Commission (CFTC) took its first enforcement of Regulation 165.19(b) against Trafigura for the use of NDAs meant to silence whistleblowers. The latest agency to take action against overly expansive NDAs is the Consumer Financial Protection Bureau (CFPB), which has announced that their employee protection regulation applies to NDAs that seek to silence whistleblowers.

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DOJ Launches New Whistleblower Incentive Program

by Kevin Chambers, Terra Reynolds, Douglas K. Yatter, and Lilia B. Vazova

Photos of authors.

From left to right: Kevin Chambers, Terra Reynolds, Douglas K. Yatter, and Lilia B. Vazova. (Photos courtesy of Latham & Watkins LLP)

DOJ’s pilot program aims to fill gaps in existing federal whistleblower programs and incentivize prompt corporate self-disclosure alongside individual whistleblower tips.

Following the March 2024 announcement of its intention to introduce a new corporate whistleblower incentive program, on August 1, 2024, the Department of Justice (DOJ) launched a three-year pilot program for rewarding whistleblowers who alert DOJ to significant corporate misconduct. DOJ’s new program, modeled after whistleblower programs run by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN), may generate a significant number of tips about potential misconduct and adds an important new dimension for companies’ compliance measures and handling of investigations.

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Empirical Data Supports Efforts to Reform Internal Corporate Whistleblower Protections

by Stephen M. Kohn, Alyce Petit, Kate Reeves, and Geoff Schweller

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Left to Right: Stephen M. Kohn, Alyce Petit, Kate Reeves and Geoff Schweller (photos courtesy of authors)

Corporate whistleblowers who report through internal compliance channels face higher rates of retaliation than those who report externally to the government, according to research published in a working paper on the Social Science Research Network (SSRN).

An analysis of 8-years worth of Dodd-Frank Act and Sarbanes-Oxley Act (SOX) whistleblower retaliation cases found that over 90% of the cases involved internal whistleblowers.

These findings are of particular importance in light of Congressional efforts to amend the Dodd-Frank Act to extend anti-retaliation protections for internal whistleblowers. They also validate the importance of regulations by the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) that explicitly do not require whistleblowers to make internal reports prior to qualifying for a reward under the Dodd-Frank.

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CFTC Year in Review: 23 Takeaways From 2023 and Predictions for 2024

by Matthew B. Kulkin, Elizabeth L. Mitchell, Gretchen Passe Roin, Timothy F. Silva, Tiffany J. Smith, Dino Wu, Matthew Beville, and Joseph M. Toner

Photos of the authors

Top (left to right): Matthew B. Kulkin, Elizabeth L. Mitchell, Gretchen Passe Roin, and Timothy F. Silva
Bottom (left to right): Tiffany J. Smith, Dino Wu, Matthew Beville, and Joseph M. Toner (photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP)

At an industry event in early 2023, Commodity Futures Trading Commission (CFTC or the Commission) Chairman Rostin Behnam set out a comprehensive agenda.[1] When Chairman Behnam detailed the CFTC’s 2023 work plan, the CFTC was building on its first year with a full slate of Commissioners, new Division Directors, and senior leadership. As we look back on the recently completed calendar year and turn our attention to the rapidly approaching 2024 presidential and congressional elections, the CFTC seems poised for another year packed with a flurry of regulatory, policy, and enforcement activity. This article lays out 23 of our key takeaways from the past year and offers insights on what might take place in the coming months.

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