Latest news with #CommodityExchangeAct
Yahoo
2 days ago
- Business
- Yahoo
Trump's CFTC Pick Troubles Tribes With Prediction Market Plans
Tribal groups are concerned Kalshi, Robinhood and pose an existential economic threat to them through sports prediction markets—and on Tuesday, it became even more clear the Commodity Futures Trading Commission (CFTC) isn't coming to their rescue. CFTC chairman nominee Brian Quintenz made his pro-market stance apparent while speaking in front of the U.S. Senate Committee on Agriculture, Nutrition and Forestry at a Tuesday confirmation hearing. Quintenz told senators the CFTC has a 'very clear' mandate to permit the sports event futures contracts that financial technology companies have offered nationwide since the start of the year, despite state and tribal objections. More from Yasiel Puig Sports Betting Guilty Plea Overturned by Federal Court Robinhood's Sports Prediction Markets Are a Hook for Wider Play ESPN Bet Faces Make-or-Break Year for $2 Billion Disney-Penn Deal Unless Congress steps in with a new law, Quintenz said, 'I need to abide by the Commodity Exchange Act.' The CFTC's exclusive regulatory authority for sports event contracts under the Commodity Exchange Act is being challenged in court by multiple states; those states, like many tribal groups, call the markets an illegal sports betting equivalent that circumvents state taxes and other regulations. While no tribal group has filed a related lawsuit to date, more than a dozen have petitioned the CFTC to shut down sports prediction markets in their regions. Quintenz, a Kalshi board member, suggested unhappy tribal groups could compete with the new sports prediction markets by launching their own. But gaming exclusivity is the very right tribes are desperate to preserve in states where sportsbook operators such as DraftKings and FanDuel are banned. 'Nothing in the CEA that I'm aware of prohibits or affects the opportunity of tribes to offer those [prediction market products],' Quintenz said in response to a question from Democrat Sen. Adam Schiff of California. President Donald Trump's agency pick said he would 'listen to the concerns of the tribes' raised by Schiff and reschedule a public roundtable discussion canceled without explanation in April by acting chair Caroline Pham. He said he did not have any information about why the original discussion was nixed. 'We respect Tribal Nations and their inherent sovereignty,' a Kalshi spokesperson wrote in an email after Quintenz's hearing. 'The Commodity Exchange Act does not restrict Tribes from engaging in gaming activities on their reservations or within the states where they operate, consistent with applicable laws. We have had productive conversations with several Tribes and are hopeful to build collaborative partnerships in the future.' Amid conflict-of-interest concerns given his Kalshi ties, Quintenz wrote in a pre-hearing letter to the CFTC that he would step down from the company's board and divest stock upon being confirmed to lead the federal agency. He said he would recuse himself from matters involving Kalshi. In Tuesday's hearing, Quintenz told U.S. Sen. Amy Klobuchar (D-Minn.) that the CFTC would appoint a 'screener' in his office 'to make sure no matter inappropriately comes before me.' The current makeup of the CFTC strains the logic of his proposed strategy. If confirmed by the Senate, Quintenz would be the only commissioner at the CFTC, with the four other slots unfilled after a spate of resignations and retirements. It is unclear, then, who else right now could regulate the rise of Kalshi and similar companies that offer sports event futures. Departing commissioner Christy Goldsmith Romero, a Democrat, last month called the pending one-person CFTC leadership structure 'a disservice to regulation.' But Quintenz said several times in his hearing that he would not explicitly urge the president to nominate candidates from both political parties to be CFTC commissioners in accordance with agency rules—or ask that empty agency spots be filled at all. 'I don't tell the president what to do,' Quintenz said to U.S. Sen. Raphael Warnock (D-Ga.). Interim CFTC chair Pham has not taken a vocal stance on sports prediction markets since being named to the post in January. The agency has been hands-off toward Kalshi and other exchanges—a full turn from how things went during Joe Biden's presidency when the agency fought Kalshi in court over its election contracts. It dropped an appeal in the Kalshi election contract case after Pham took over for Biden-era CFTC chair Rostin Behnam. Quintenz has long argued that sports event contracts are a legitimate financial hedging tool that provide an opportunity for 'risk management, price discovery and price dissemination.' His claims date back to his stint as a CFTC commissioner from 2017-2021. During Tuesday's hearing, Quintenz repeated many of his talking points from a 2021 speech to the Federalist Society in which he said the CFTC has no right to inhibit sports prediction markets under the Commodity Exchange Act. The U.S. Senate Committee on Agriculture, Nutrition and Forestry will vote on whether to recommend Quintenz for full Senate approval. Then, the Senate will hold a final vote on Quintenz's nomination. Best of Most Expensive Sports Memorabilia and Collectibles in History The 100 Most Valuable Sports Teams in the World NFL Private Equity Ownership Rules: PE Can Now Own Stakes in Teams
Business Wire
30-05-2025
- Business
- Business Wire
Kirby McInerney Announces CFTC Whistleblower Award
NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP is proud to announce that the Commodity Futures Trading Commission (the 'Commission') has awarded approximately $700,000 to a whistleblower it represented. Under the Commodity Exchange Act and the Commission's Whistleblower rules, a whistleblower who provides valuable information is entitled to between 10% and 30% of monetary sanctions collected by the Commission for commodities law violations. The Commission gave the award in recognition that the whistleblower's 'highly significant' information caused the Commission's Division of Enforcement to open an investigation and 'precisely and accurately described' illegal conduct in the commodities markets. The award was also in recognition for the 'high degree of assistance' that the whistleblower provided the Division after the investigation was opened. Ultimately, the Commission concluded that the whistleblower 'conserved substantial resources for the Commission.' 'This case underscores the degree to which whistleblowers can play a critical role in helping regulators police esoteric commodities markets,' said Kirby McInerney Co-Managing Partner David Kovel, who oversaw the case. 'While we disagree with aspects of the CFTC's determination, overall we applaud the CFTC for its support and recognition of whistleblowers, like our client, who bring this important value to the enforcement of commodities markets.' Kirby McInerney extends its gratitude to its client and to the CFTC for investigating and pursuing this case. Kirby McInerney is a New York-based law firm concentrating in whistleblower, securities, antitrust, and consumer litigation. The firm's efforts on behalf of investors, consumers, and the government have resulted in recoveries totaling billions of dollars. The firm represents whistleblowers in numerous programs, including in the SEC, CFTC, and IRS whistleblower programs and in cases under the federal and state False Claims Acts. Kirby McInerney has been involved in some of the most cutting-edge areas of commodities litigation, and represented the whistleblower who received nearly $200 million, the largest CFTC whistleblower award ever. The firm's commodity litigation experience includes cases involving the manipulation of agricultural, energy, fixed income, foreign exchange, metals, and other markets. Notably, Kirby McInerney served as co-lead counsel for a class of exchange-based plaintiffs in the high-profile In re LIBOR-Based Financial Instruments Antitrust Litig., No. 11 MD 2262 (S.D.N.Y.) and secured settlements totaling $190 million for Eurodollar Futures traders. This amount represents the largest recovery in a 'futures-only' commodities class action litigation. Kirby McInerney's CFTC Whistleblower Team is led by the firm's Co-Managing Partner, David Kovel, who was previously a commodities trader for a large financial firm. This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Yahoo
30-05-2025
- Business
- Yahoo
Kirby McInerney Announces CFTC Whistleblower Award
NEW YORK, May 30, 2025--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP is proud to announce that the Commodity Futures Trading Commission (the "Commission") has awarded approximately $700,000 to a whistleblower it represented. Under the Commodity Exchange Act and the Commission's Whistleblower rules, a whistleblower who provides valuable information is entitled to between 10% and 30% of monetary sanctions collected by the Commission for commodities law violations. The Commission gave the award in recognition that the whistleblower's "highly significant" information caused the Commission's Division of Enforcement to open an investigation and "precisely and accurately described" illegal conduct in the commodities markets. The award was also in recognition for the "high degree of assistance" that the whistleblower provided the Division after the investigation was opened. Ultimately, the Commission concluded that the whistleblower "conserved substantial resources for the Commission." "This case underscores the degree to which whistleblowers can play a critical role in helping regulators police esoteric commodities markets," said Kirby McInerney Co-Managing Partner David Kovel, who oversaw the case. "While we disagree with aspects of the CFTC's determination, overall we applaud the CFTC for its support and recognition of whistleblowers, like our client, who bring this important value to the enforcement of commodities markets." Kirby McInerney extends its gratitude to its client and to the CFTC for investigating and pursuing this case. Kirby McInerney is a New York-based law firm concentrating in whistleblower, securities, antitrust, and consumer litigation. The firm's efforts on behalf of investors, consumers, and the government have resulted in recoveries totaling billions of dollars. The firm represents whistleblowers in numerous programs, including in the SEC, CFTC, and IRS whistleblower programs and in cases under the federal and state False Claims Acts. Kirby McInerney has been involved in some of the most cutting-edge areas of commodities litigation, and represented the whistleblower who received nearly $200 million, the largest CFTC whistleblower award ever. The firm's commodity litigation experience includes cases involving the manipulation of agricultural, energy, fixed income, foreign exchange, metals, and other markets. Notably, Kirby McInerney served as co-lead counsel for a class of exchange-based plaintiffs in the high-profile In re LIBOR-Based Financial Instruments Antitrust Litig., No. 11 MD 2262 (S.D.N.Y.) and secured settlements totaling $190 million for Eurodollar Futures traders. This amount represents the largest recovery in a "futures-only" commodities class action litigation. Kirby McInerney's CFTC Whistleblower Team is led by the firm's Co-Managing Partner, David Kovel, who was previously a commodities trader for a large financial firm. This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules. View source version on Contacts Kirby McInerney LLPDavid E. Kovel, Esq. 212-371-6600https:// dkovel@ Sign in to access your portfolio
Yahoo
09-04-2025
- Business
- Yahoo
DOJ scales back crypto enforcement
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. The Department of Justice will no longer prosecute cryptocurrency firms for 'unwitting' regulatory violations and will instead focus on prosecuting those who victimize crypto investors and those who use digital assets to support other illicit activities. The DOJ has also disbanded its National Cryptocurrency Enforcement Team, effective immediately, and ordered its Market Integrity and Major Frauds Unit to cease crypto enforcement. Deputy Attorney General Todd Blanche inked a memo detailing such changes Monday. 'The Justice Department will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump's actual regulators do this work outside the punitive criminal justice framework,' wrote Blanche. Prosecutors are directed to stop charging regulatory violations, including unlicensed money transmitting, violations of the Bank Secrecy Act, unregistered securities offering violations, unregistered broker-dealer violations, and other violations of registration requirements under the Commodity Exchange Act 'unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully.' The policy outlined in Executive Order 14178, according to Blanche, requires the DOJ to prioritize investigations that include 'embezzlement and misappropriation of customers' funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts.' Such focuses are intended to restore stolen customer funds and build investor confidence in digital assets, Blanche wrote. Ongoing investigations that don't connect into illicit activities such as organized crime, human trafficking, drug smuggling and terrorism, or take advantage of investors, should be closed, Blanche wrote. The memo is in line with a slew of crypto regulatory developments under President Donald Trump, including rule easings at the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Commodity Futures Trading Commission. The Securities and Exchange Commission has dropped several ongoing cases against crypto firms and has alsodeveloped a crypto task force. Trump also announced the creation of, and named the coins within, a national crypto reserve. These developments align with promises Trump made along the campaign trail while courting the crypto vote. During his campaign to be the 47th president, he raised millions from crypto firms and professionals who saw him as, as Kraken founder Jesse Powell described him, 'the only pro-crypto majority party candidate.' Powell shelled out $1 million for Trump. Six years ago, the president was a vocal crypto skeptic. 'I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,' Trump posted on the social media site previously known as Twitter. Now, though, he appears to be all in. Beyond tapping crypto-friendly regulators and writing multiple digital asset-related executive orders, he joined the industry by launching World Liberty Financial, a crypto firm, with his sons in September. He and his wife Melania also each launched their own meme coins, $TRUMP and $MELANIA, days before inauguration day. $TRUMP is currently worth $8.16, down from its all-time high of $73.43; and $MELANIA is now worth $0.53, down from its all-time high of $13.73, according to CoinMarketCap. Sign in to access your portfolio
Yahoo
09-04-2025
- Business
- Yahoo
Kalshi Will Win Battle with Nevada: Crypto Attorney
The American legal tradition of federalism, balancing state authority with federal control, is being tested by a new frontier: online prediction markets. At the center of everything is Donald Trump Jr., advised Kalshi. Nevada and New Jersey have issued cease-and-desist orders against Kalshi over the prediction market's sports contracts, claiming they violate state gambling laws. But Kalshi has hit back, arguing that what it offers isn't gambling and that it's regulated by the Commodity Futures Trading Commission and the Commodities Exchange Act as it is a prediction market, not a gambling venue – an argument that crypto attorney Aaron Brogan says should be an easy win in court. "I think clearly Kalshi is going to win these cases," Brogan said in an interview with CoinDesk. "If you look at the language of the Commodity Exchange Act (CEA), it says that the CFTC has exclusive jurisdiction over any contracts that fall within its regulatory purview, which derivative contracts and event contracts clearly do." Prediction markets like Kalshi and Polymarket operate as neutral intermediaries, matching orders just like any other exchange under CFTC purview. There's no sportsbook with a prediction market; the operator of the market doesn't bet against its users. For prediction market operators, sports has been a significant growth area. Data from Polymarket Analytics shows the category has surpassed the 2024 election for volume. "[Kalshi is] not taking a side of the bet as the market in that case, which fundamentally changes the incentives involved and makes the product different in a holistic way,' Brogan explained. Kalshi has self-certified these event contracts with the CFTC, a process allowing federally regulated derivatives exchanges to list new products by attesting their compliance with regulatory requirements without needing explicit pre-approval from the agency. For its part, the CFTC seems to be receptive to the argument that the outcomes of sports games are commodities, with President Donald Trump's pick to run the commission, Brian Quintenz, arguing in 2021 that they can serve a legitimate economic purpose as hedging instruments, distinct from pure betting activities, and thus should not automatically be prohibited under the CEA. Brogan recognizes the reasoning behind Nevada's concerns, given the state's historical reliance on gambling revenues. However, he points out that Nevada's actions against Kalshi could inadvertently raise serious questions about the legitimacy of Nevada's own gambling markets. By categorizing Kalshi's federally regulated event contracts as gambling, Nevada regulators have unintentionally highlighted that their own state-approved gambling operations, such as sports betting markets and other event-based wagering, might themselves technically qualify as derivative contracts. 'In that case, federal preemption could theoretically crowd out state authority to oversee those gambling markets at all,' said Brogan. A victory for Kalshi, said Brogan, could transform American sports betting culture entirely if it's done through prediction markets instead of traditional gambling companies. Brogan notes that if Kalshi prevails, states could respond politically or legally, possibly lobbying Congress or filing an Administrative Procedure Act claim against the CFTC, although he doubts such challenges would succeed. Ultimately, Kalshi's litigation against state regulators presents a landmark federalism dilemma: Can states retain traditional authority over gambling regulation, or will federal regulatory frameworks dominate in the digital age? "This is incredibly complicated," Brogan concluded, "and we're right on the cusp of litigation that could definitively define who will predominate. It's complex, but it's going to be really important." Sign in to access your portfolio
