CFTC Regulatory Updates

What Changed

• - Introduces principles‑based requirements for vertically integrated market structures involving affiliations between derivatives clearing organizations, designated contract markets, swap execution...
• Amends Part 37 to set additional governance, conflict‑management, and structural requirements for swap execution facilities where the SEF is affiliated with an intermediary or trading entity.
• Amends Part 38 to impose enhanced conflict‑of‑interest and self‑regulatory safeguards for designated contract markets that are affiliated with futures commission merchants or proprietary trading...
• Amends Part 39 to clarify and strengthen requirements on derivatives clearing organizations in group structures where the DCO is affiliated with intermediaries or other market participants, including...
• Amends regulation 1.52 (accounts and records; FCM supervisory requirements) to reflect the heightened expectations placed on futures commission merchants that are part of vertically integrated...

Suggested Considerations

• Identify and map all affiliate relationships involving CFTC‑regulated entities within your group (DCO, DCM, SEF, FCM, SD/MSP, trading entities, market makers) and document how roles and control relationships could create actual or perceived conflicts of interest.
• Conduct a gap analysis of existing governance, conflicts‑of‑interest, information‑barrier, and supervision frameworks against the anticipated principles‑based expectations for vertically integrated structures under Parts 37, 38, 39 and regulations 1.52 and 1.55.
• Review and, where necessary, enhance board‑level and committee‑level oversight arrangements for affiliated entities to ensure independent decision‑making on listing, clearing, rule enforcement, membership, and client treatment where affiliates are involved.
• Assess current customer risk disclosures, including those required under regulation 1.55 for FCMs, to determine whether affiliate relationships and related conflicts are adequately described, and prepare draft revisions that could be implemented if the new requirements are finalized.
• Engage legal, compliance, and business stakeholders for each affected entity (DCO, DCM, SEF, FCM, trading entity) to prepare a coordinated comment letter to the CFTC explaining operational impacts, potential unintended consequences, and recommendations on specific rule language.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9274-26
• [2] reginfo.gov/public/do/eAgendaViewRule?pubId=202404&RIN=30...
• [3] cftc.gov/LawRegulation/DoddFrankAct/Dodd-FrankProposedRul...
• [4] comments.cftc.gov/FederalRegister/Proposed.aspx?Type=List...
• [5] public-inspection.federalregister.gov/2023-28745.pdf
• [6] content.next.westlaw.com/practical-law/document/If6afd4b4...
• [7] public-inspection.federalregister.gov/2012-00935.pdf?1329...
• [8] cftclaw.com

What Changed

• - The CFTC has extended the comment deadline on the RFC regarding 24/7 trading of standard futures contracts and perpetual contracts in energy markets by 30 days, moving the due date to 26 August...
• The RFC focuses on the extension of standard futures contracts, including energy futures, to a 24/7 trading schedule while keeping fixed expirations but allowing potentially material economic changes...
• The RFC separately focuses on the listing and regulation of perpetual contracts that reference physically delivered or storable energy commodities, such as crude oil, and that have no fixed...
• The Commission has added additional questions to the original RFC to probe market integrity, price formation, operational resilience, customer protections, and risk management implications of 24/7...
• The RFC builds on and is informed by the CFTC’s May 29, 2026 coordinated actions on perpetual contracts and 24/7 trading in digital commodities, including the Policy Statement on perpetual contracts,...

Suggested Considerations

• Identify and convene an internal cross‑functional working group (trading, risk, operations, compliance, legal, and IT) to assess potential impacts of 24/7 trading and energy perpetual contracts on your firm’s business model and control environment.
• Perform a gap analysis of current trading, clearing, surveillance, margin, and risk management frameworks against the operational and risk expectations articulated in recent CFTC staff advisories and policy statements on 24/7 markets and perpetual contracts.
• Draft and submit a data‑driven comment to the CFTC by 26 August 2026 addressing the RFC questions most relevant to your activities, including empirical analysis of liquidity, price formation, manipulation risk, funding rate behavior, and customer protection in energy derivatives.
• Review and update internal policies and procedures for trade surveillance, market abuse monitoring, and manipulation detection to address continuous 24/7 trading windows and any contemplated use of energy perpetual contracts.
• Assess whether current staffing models, systems support, and incident‑response processes can support 24/7 trading or clearing operations, and document enhancements or mitigations that would be needed to maintain operational resilience.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9271-26
• [2] dentonscrypto.com/cftc-issues-staff-advisory-setting-expe...
• [3] bloomberg.com/news/articles/2025-04-21/cftc-seeks-input-o...
• [4] bloomberg.com/news/articles/2026-06-23/cftc-seeks-input-o...
• [5] wilmerhale.com/-/media/files/shared_content/editorial/pub...
• [6] sidley.com/en/insights/newsupdates/2025/04/the-us-cftc-lo...
• [7] complianceconcourse.willkie.com/articles/cftc-releases-pr...
• [8] jdsupra.com/legalnews/cftc-advances-framework-for-perpetu...

What Changed

• - The CFTC proposes an alternate reporting framework for certain fully collateralized event contracts, replacing reliance on certain reporting provisions in Parts 38, 39, 43, and 45 with reporting...
• The proposal would amend Part 15, Part 16, and Part 17 of the CFTC’s regulations.
• The proposal would add a new §16.03 titled “Covered Event Contracts” to Part 16.
• The proposal would require reporting pursuant to §16.00, §16.01, Part 17, and Part 18 for covered event contracts.
• The proposal would apply to reporting by certain reporting markets, futures commission merchants, clearing members, and foreign brokers.

Suggested Considerations

• Firms that list, clear, intermediate, or report covered event contracts should inventory all event-contract products and map each product to the current reporting regime and the proposed Parts 15 through 18 framework.
• Compliance teams should identify all reporting fields, systems, and workflows currently relying on Parts 38, 39, 43, or 45 for event-contract reporting and assess whether those processes would need redesign.
• FCMs, clearing members, and foreign brokers should review their data governance and source-of-truth controls to ensure they can produce the reporting elements required under §16.00, §16.01, Part 17, and Part 18 if the proposal is adopted.
• Firms should track the public-comment process and prepare comments if the proposed framework creates operational gaps, duplicated reporting, or ambiguities in product scope.
• Market participants should review reliance on existing no-action letters and prepare contingency plans for a transition from interim relief to a codified rule.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9261-25
• [2] cftc.gov/PressRoom/PressReleases/9131-26
• [3] gtlaw.com/en/insights/2026/6/cftc-proposes-new-rules-for-...
• [4] cftc.gov/taxonomy/term/4196
• [5] track360.io/blog/event-contracts-explained-cftc-operator-...
• [6] cftc.gov/IndustryOversight/ContractsProducts/index.htm
• [7] cftc.gov/LearnandProtect/PredictionMarkets

What Changed

• - The CFTC has initiated federal litigation against Kentucky seeking declaratory and injunctive relief to prevent the state from enforcing civil actions and special transaction fees against...
• Kentucky has filed civil enforcement actions in state court against CFTC‑regulated DCMs, characterising their event contracts as illegal gambling and seeking substantial monetary penalties.
• Kentucky has adopted a new “special transaction fee” (functionally an excise or levy) specifically targeting transactions on CFTC‑regulated DCMs, intended to incentivise these platforms to cease...
• The CFTC is explicitly framing Kentucky’s actions as an impermissible interference with Congress’s federal preemption framework and the CFTC’s exclusive jurisdiction over futures, options, and swaps,...
• The Commission is building a broader litigation strategy, noting parallel proceedings against Minnesota, Illinois, and Rhode Island and amicus participation before the Sixth and Ninth Circuits and...

Suggested Considerations

• Review and update state‑law risk assessments for all CFTC‑regulated DCM activities, with a specific focus on gambling, consumer‑protection, tax, and licensing regimes in Kentucky and other active states.
• Conduct a targeted legal analysis of whether existing or planned event‑based or prediction‑market contracts might be recharacterised as gambling under relevant state laws, and document the basis for treating them as CFTC‑regulated derivatives.
• Map all customer‑facing operations, servers, marketing, and on‑the‑ground presence in Kentucky and other contentious states, and evaluate whether operational changes (e.g. geofencing, revised onboarding flows) are warranted pending judicial outcomes.
• Engage external counsel to monitor *CFTC v. Kentucky* and related state and federal cases, and establish an internal escalation protocol so that material developments (e.g. injunctions, adverse rulings) trigger prompt compliance and product‑governance review.
• Update board and senior management reporting to include a standing item on state–federal jurisdictional conflicts affecting prediction markets, highlighting litigation exposure, revenue at risk, and contingency plans.

Key Dates

References

• [1] cnbc.com/2026/06/23/cftc-sues-kentucky-over-actions-again...
• [2] thehill.com/policy/technology/5937031-cftc-lawsuit-kentuc...
• [3] mlex.com/articles/2493033/us-cftc-sues-kentucky-over-enfo...
• [4] techechelon.com/post/cftc-sues-kentucky-over-prediction-m...
• [5] thedefiant.io/news/regulation/cftc-sues-kentucky-exclusiv...
• [6] x.com/RVanGrack/status/2067418512776171785
• [7] binance.com/en/square/post/337324929676706
• [8] cms.stateaffairs.com/wp-content/uploads/2026/06/CFTC-v-KY...

What Changed

• - The CFTC proposes a 30% presumption for whistleblower awards of $5 million or less.
• The presumption remains subject to Commission discretion and application of relevant regulatory factors.
• The proposal is modeled on SEC Rule 21F-6(c) to further harmonize CFTC and SEC whistleblower frameworks.
• The CFTC says the change is intended to improve the efficiency, transparency, and predictability of award processing.
• The proposal would affect how the CFTC’s Whistleblower Office evaluates award claims under Part 165.

Suggested Considerations

• Review whistleblower intake, escalation, and investigation procedures to ensure the firm can identify potential CEA violations before they become external whistleblower submissions.
• Update training for front office, operations, compliance, and management personnel on CFTC whistleblower protections and the increased incentive structure.
• Assess whether confidentiality, reporting, and non-retaliation controls are sufficiently documented to withstand scrutiny if a whistleblower complaint arises.
• Reconfirm that internal policies do not discourage employees from communicating with the CFTC or otherwise create retaliation risk.
• Monitor the Federal Register publication date and decide whether the firm, trade association, or counsel should submit a comment during the open comment period.

Key Dates

References

• [1] fincen.gov/news/news-releases/fincen-proposes-rule-pay-wh...
• [2] whistleblower.gov/overview
• [3] federalregister.gov/documents/2026/04/01/2026-06271/whist...
• [4] cftc.gov/LawRegulation/DoddFrankAct/Dodd-FrankProposedRul...
• [5] cftc.gov/PressRoom/PressReleases/9249-26
• [6] cftc.gov/PressRoom/PressReleases/9194-26
• [7] comments.cftc.gov/FederalRegister/Proposed.aspx
• [8] kkc.com/frequently-asked-questions/cftc-whistleblower-awa...

What Changed

• - The NPRM would amend CFTC Regulation 40.11 to embed a formal analytical framework for assessing whether an event contract involves an activity enumerated in CEA Section 5c(c)(5)(C) and, if so,...
• The NPRM would add Appendix F to Part 40 to set out the factors, tests, and procedural steps the Commission will apply when reviewing specific event contracts referencing enumerated activities.
• The proposal would define key statutory terms, including at minimum “involve” and “gaming,” to clarify when an event contract is considered to touch an enumerated activity under CEA Section...
• The NPRM would establish a 90‑day review process for the Commission to evaluate event contracts that may implicate enumerated activities, including procedural protections such as notice, opportunity...
• The proposed framework would codify public‑interest factors the Commission will apply when deciding whether a particular contract involving an enumerated activity is contrary to the public interest...

Suggested Considerations

• Map and inventory all existing and planned event contracts listed or cleared through CFTC‑registered entities to identify those that may “involve” terrorism, assassination, war, gaming, or conduct unlawful under federal or state law.
• Conduct a legal analysis of how the proposed definitions of “involve” and “gaming” would apply to your current product set, particularly sports, political, entertainment, and other contest‑based contracts, and document the rationale.
• Review and update internal product‑approval and new‑contract listing procedures to incorporate the proposed 90‑day CFTC review process, including timelines, documentation standards, and decision gates tied to Section 5c(c)(5)(C).
• Develop or update written policies and controls to ensure that contracts potentially involving enumerated activities are escalated for legal, compliance, and regulatory‑affairs review before submission to the CFTC.
• For DCMs and SEFs, enhance product‑submission templates to clearly address the proposed Appendix F public‑interest factors, including description of the underlying event, potential for unlawful activity, market integrity risks, and consumer‑protection considerations.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/8907-24
• [2] cftc.gov/LawRegulation/FederalRegister/proposedrules/2024...
• [3] mofo.com/resources/insights/240520-cftc-issues-proposed-r...
• [4] willkie.com/publications/2026/03/prediction-markets-cftc-...
• [5] sidley.com/en/insights/newsupdates/2026/03/us-cftc-issues...
• [6] cftc.gov/LawRegulation/FederalRegister/proposedrules/2026...
• [7] federalregister.gov/documents/2024/06/10/2024-12125/event...
• [8] steptoe.com/en/news-publications/Proposed-CFTC-Event-Cont...

What Changed

• - The CFTC has rescinded the policy in Appendix A to Part 10 that prevented the Commission from accepting settlement offers where a respondent or defendant continued to deny the allegations in a...
• The CFTC will now accept settlements even where the settling party publicly denies or continues to deny the CFTC’s allegations, provided other settlement terms are satisfied.
• The CFTC has stated that it will not enforce existing no-deny (neither‑admit‑nor‑deny) provisions in settlements that have already been entered.
• If a settling party breaches an existing no-deny provision, the CFTC will not allege breach of contract, seek to reopen the matter, ask a district court to vacate the settlement, or reopen an...
• The rescission does not alter the CFTC’s discretion to: - settle with defendants who decline to admit facts or liability; or - negotiate and require admissions of facts or liability in...

Suggested Considerations

• Review all existing CFTC settlement orders, consent orders, and related agreements to identify any no‑deny or neither‑admit‑nor‑deny clauses and update internal records to reflect that the CFTC has stated it will not enforce those provisions.
• Update internal enforcement and litigation playbooks to incorporate the new settlement flexibility, including explicit guidance that public denials post‑settlement may be possible but should be subject to legal and reputational risk review.
• Revise board- and senior‑management reporting on CFTC enforcement risks and settlement strategy to reflect the rescission of the no‑deny policy and the availability of settlements without waiving the ability to contest allegations in public communications.
• Implement or update communications and investor‑relations protocols governing post‑settlement statements, ensuring any public denials or clarifications are coordinated with legal, compliance, and, where relevant, parallel regulators or criminal authorities.
• For ongoing CFTC investigations or settlement negotiations, instruct external and internal counsel to reassess settlement strategy, including whether to seek terms that preserve the firm’s ability to deny or contest aspects of the CFTC’s allegations after settlement.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9247-26
• [2] sec.gov/newsroom/press-releases/2026-45-sec-rescinds-poli...
• [3] gibsondunn.com/undeniably-deniable-sec-rescinds-policy-on...
• [4] cftc.gov/media/14106/NeitherDenyNorAdmitRescission060326/...
• [5] federalregister.gov/documents/2026/05/21/2026-10132/resci...
• [6] binance.com/en/square/post/330358517783154
• [7] cftc.gov

What Changed

• - The CFTC Portal now supports consolidated product self‑certification submissions, enabling exchanges to file a single set of certification documents that apply to multiple closely related contracts...
• Exchanges are no longer required to upload multiple identical copies of supporting product certification documents when listing several closely related contracts; one shared documentation set can be...
• The enhancement is framed as an administrative/technical change to the filing process; it does not alter substantive legal standards for product self‑certification under the Commodity Exchange Act or...
• The CFTC has issued updated submission instructions on the Portal site specifying how to use the new consolidated filing functionality, including formatting and process guidance.
• Dedicated technical and non‑technical CFTC contacts have been identified (Howard Rosen for system use; Chris Goodman for product submission process questions), signaling that the Commission expects...

Suggested Considerations

• Review and obtain the updated submission instructions on the CFTC Portal and ensure legal, compliance, and operations staff understand the consolidated filing functionality and any new formatting or data‑entry requirements.
• Update internal product approval and submission procedures (including Part 40 playbooks and checklists) to reflect the ability to file a single set of documents for multiple closely related contracts, and to define when consolidation is appropriate.
• Revise internal documentation templates (e.g., product term sheets, legal analyses, core principle compliance memos, risk assessments) so that they can explicitly support multiple closely related contracts in a single package where relevant.
• Adjust governance workflows (approvals, sign‑offs, and quality checks) so that:
• Each contract included in a consolidated submission is clearly identified and traceable, and

Key Dates

References

• [1] quickreads.ext.katten.com/post/102jlxr/the-cftc-amends-pa...
• [2] cftc.gov/PressRoom/SpeechesTestimony/romerostatement072623c
• [3] cftc.gov/IndustryOversight/ContractsProducts/ListingProce...
• [4] cftc.gov/PressRoom/SpeechesTestimony/mersingerstatement09...
• [5] law.cornell.edu/cfr/text/17/40.6
• [6] federalregister.gov/documents/2024/11/07/2024-24388/provi...
• [7] fia.org/fia/articles/cftc-examines-self-certification-pro...
• [8] cftc.gov/IndustryOversight/ContractsProducts/index.htm

What Changed

• - The CFTC formally recognizes that perpetual contracts may be listed as “futures contracts” by DCMs, as evidenced by an order permitting listing of a perpetual contract referencing the spot price of...
• The Commission states that perpetual contracts have “unique characteristics” that vary by underlying asset, and therefore they will not be treated as a homogeneous product category for listing...
• For perpetual contracts referencing asset classes not covered by the contemporaneous bitcoin perpetual order, the Commission indicates that the appropriate path is a case‑by‑case review under CFTC...
• The policy statement signals that DCMs should expect closer CFTC scrutiny of perpetual contract design, including settlement mechanisms and underlying market integrity, before new perpetuals (beyond...
• The statement confirms that it is a policy statement rather than a binding rule, but it effectively sets Commission expectations for how DCMs must approach the listing of perpetual contracts going...

Suggested Considerations

• DCMs intending to list new perpetual contracts must route proposed products that are not clearly covered by the existing bitcoin perpetual order through a Commission Regulation 40.3 case‑by‑case review process, and should build internal product‑approval workflows accordingly.
• DCMs must enhance their surveillance, market‑integrity, and risk‑management frameworks for perpetual contracts, including monitoring of the referenced spot market, funding‑rate or cash‑flow mechanisms, and potential manipulation vectors stemming from the underlying asset.
• FCMs and clearing members should identify client exposure to perpetual futures, review margin models and risk limits, and ensure that risk disclosures, product descriptions, and account‑opening documentation accurately reflect the regulatory status and unique risks of perpetual futures.
• Compliance teams at DCMs and intermediaries should update policies and procedures for new product approval, explicitly flagging perpetual contracts as requiring heightened CFTC engagement and governance review before listing.
• Legal and regulatory affairs teams should brief senior management and boards on the policy statement, emphasizing that future perpetual contracts on non‑bitcoin or non‑covered asset classes carry additional regulatory scrutiny and potential delays due to the required case‑by‑case review.

Key Dates

References

• [1] cadwalader.com/resources/clients-friends-memos/cftcs-incr...
• [2] cftc.gov/PressRoom/PressReleases
• [3] cftc.gov/PressRoom/index.htm
• [4] cftc.gov
• [5] cftc.gov/PressRoom/PressReleases?page=4
• [6] cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement07...
• [7] cftc.gov/PressRoom/PressReleases/8188-20
• [8] cftc.gov/PressRoom/SpeechesTestimony/opabehnam35

What Changed

• - The CFTC has formally sought to intervene in a U.S. District Court case in Rhode Island to halt the state’s attempt to apply state gambling laws and seek civil penalties against a CFTC‑registered...
• The Commission has publicly reaffirmed that event contracts traded on CFTC‑registered exchanges are “commodity derivatives” squarely within the CFTC’s regulatory remit under the Commodity Exchange...
• The CFTC is explicitly characterizing its authority over CFTC‑registered prediction markets as “exclusive jurisdiction,” signaling that state gambling regulators and attorneys general should not...
• The Rhode Island dispute is identified as part of a broader pattern of state challenges to CFTC jurisdiction over prediction markets, following similar or related litigation in Arizona, Connecticut,...
• The enforcement posture indicates that CFTC‑registered contract markets facing state actions can expect active CFTC litigation support when states attempt to apply gambling or gaming statutes to...

Suggested Considerations

• Review current and planned event or prediction‑market contracts to confirm that they are structured, documented, and marketed as commodity derivatives under the Commodity Exchange Act rather than as gaming or wagering products.
• Update internal legal and compliance memoranda on federal preemption and CFTC “exclusive jurisdiction” to reflect the CFTC’s latest public position and the ongoing Rhode Island and related state cases.
• Map state‑law exposure for event contracts by conducting a jurisdictional sweep of gambling, gaming, bucket‑shop, and “games of chance” statutes for key states where customers or operations are located, with particular focus on Rhode Island, Arizona, Connecticut, Illinois, New York, and Minnesota.
• Enhance product‑approval and new‑business committees’ procedures so that, before launching event contracts, they explicitly document CEA coverage, CFTC oversight, and a preemption analysis versus relevant state gambling laws.
• For CFTC‑registered contract markets, establish and maintain a litigation and regulatory‑strategy playbook for responding to state attorney‑general investigations or enforcement demands, including criteria for when to seek CFTC support or intervention.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9238-26
• [2] sec.gov/enforcement-litigation/litigation-releases/lr-23796
• [3] newsfromthestates.com/article/feds-jump-after-battle-over...
• [4] law360.com/articles/2483093/cftc-seeks-to-join-kalshi-fig...

What Changed

• - The CFTC Division of Enforcement has adopted a new, unified cooperation policy that expressly supersedes all prior Division cooperation and self‑reporting advisories (including the 2017 corporate...
• The new advisory establishes a clear “declination pathway” under which, absent aggravating circumstances, a respondent that voluntarily self‑reports, fully cooperates, timely and appropriately...
• The advisory formalizes that voluntary self‑reporting is a central prerequisite for the highest level of credit, distinguishing between cases with self‑reports (potential declination or high...
• The policy confirms that “full cooperation” will be a necessary condition for a declination, which in practice will require proactive, resource‑intensive engagement with Enforcement beyond mere...
• The advisory codifies that timely and appropriate remediation is a separate and indispensable requirement for top‑tier outcomes, emphasizing that firms must implement corrective measures before...

Suggested Considerations

• Identify and catalogue all existing internal policies, playbooks, and checklists relating to CFTC investigations, dawn raids, inquiries, self‑reporting, and cooperation, and amend them to reflect the new advisory’s superseding status.
• Update the firm’s enforcement‑response framework to explicitly incorporate the new declination pathway, including clear decision criteria for when and how to voluntarily self‑report potential CFTC violations.
• Establish or refine escalation triggers for potential insider trading, fraud, manipulation, and market abuse in CFTC‑regulated markets to ensure that issues can be investigated and elevated quickly enough to support “prompt” and “voluntary” self‑reporting.
• Design and document a structured internal investigation protocol that can generate the level of factual development, analysis, and documentation needed to demonstrate “full cooperation,” including protocols for sharing findings, data, and analytics with the CFTC where appropriate.
• Implement procedures to rapidly secure, preserve, and collect relevant trading records, communications (including messaging apps), surveillance alerts, and algorithmic trading data so that the firm can cooperate effectively and avoid any appearance of obstruction or delay.

Key Dates

References

• [1] jdsupra.com/legalnews/cftc-s-division-of-enforcement-issu...
• [2] cliffordchance.com/content/dam/cliffordchance/briefings/2...
• [3] skadden.com/-/media/files/publications/2020/11/cftc-issue...
• [4] sidley.com/en/insights/newsupdates/2025/03/us-cftc-enforc...
• [5] cftc.gov/media/11821/EnfAdv_Resolutions022525/download
• [6] cftc.gov/PressRoom/PressReleases
• [7] morganlewis.com/pubs/2025/03/cftc-enforcement-replaces-pr...
• [8] cftc.gov/sites/default/files/idc/groups/public/@lrenforce...

What Changed

• This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements.
• Fraud in futures trading (CEA Section 6(c), 7 U.S.C. § 9).
• Fraud by associated persons of commodity pool operators (CPAs) (CFTC Regulation 4.41(a)(1), 17 C.F.R. § 4.41).
• Acting as an unregistered commodity pool operator (CPO) (CEA Section 4m(1), 7 U.S.C. § 6m).
• Controlling person liability for firm violations (CEA Section 13(b), 7 U.S.C. § 13c(b)), as applied to Matos over Aureus.[https://www.cftc.gov/PressRoom/PressReleases/9212-26]

Suggested Considerations

• Registration verification: Confirm CPO/AP registration status via NFA BASIC (https://www.nfa.futures.org/basicnet/) before solicitations; prohibit any implication of CFTC "licensing" without proof.
• Marketing review: Audit all promotional materials for false claims (e.g., seals, signatures, fictitious licenses); require pre-approval by compliance.
• Fund segregation: Implement strict controls on pool participant funds, including third-party custody and daily reconciliations to prevent misappropriation.
• Controlling person policies: Document oversight duties for principals; conduct gap analyses for personal liability under CEA Section 13(b).
• Training: Mandatory annual training on CEA fraud provisions, with attestations.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9124-25
• [2] cftc.gov/PressRoom/PressReleases/9148-25
• [3] forkeylaw.com/blog/categories/cftc-enforcement-actions/
• [4] cftc.gov/PressRoom/PressReleases?c=1180800&page=105

What Changed

There are no new regulatory requirements or changes imposed by this publication; instead, it documents a court-granted TRO that temporarily blocks Arizona's enforcement of state criminal and gambling laws against CFTC-regulated prediction markets, affirming CFTC's claimed exclusive jurisdiction over event contracts via federal preemption under the Commodity Exchange Act.

Suggested Considerations

• Monitor federal court dockets in the District of Arizona for updates on the preliminary injunction hearing and broader cases against other states.
• Document compliance with CFTC regulations for event contracts to demonstrate adherence to federal law in any state inquiries.
• Review state exposure for prediction market activities, pausing non-federal compliant operations in high-risk states like Arizona pending resolution.
• Enhance legal consultations on federal preemption defenses for ongoing or potential state enforcement. https://www.cftc.gov/PressRoom/PressReleases/9211-26

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9208-26
• [2] tradeinformer.com/regulations/cftc-arizona-prediction-mar...
• [3] gamingintelligence.com/legal/228985-cftc-intervenes-in-ar...
• [4] news.bitcoin.com/cftc-seeks-injunction-restraining-order-...
• [5] complianceweek.com/regulatory-enforcement/cftc-sues-state...
• [6] grcreport.com/post/cftc-asks-court-to-step-in-as-arizona-...
• [7] mlex.com/articles/2463704/us-cftc-seeks-injunction-to-sto...

What Changed

• The CFTC's enforcement action establishes several critical legal positions:
• Federal Preemption Doctrine: The CFTC asserts that the Commodity Exchange Act grants it exclusive jurisdiction over event contracts and prediction markets, rendering state gambling laws inapplicable...
• Scope of Federal Authority: The CFTC claims "clear and longstanding exclusive jurisdiction" to regulate event contracts, positioning prediction markets as commodities derivatives rather than gambling...
• Injunctive Relief Sought: The CFTC is requesting both preliminary injunctions (immediate relief) and permanent injunctions (ongoing prohibition) preventing states from enforcing preempted laws...
• Declaratory Judgment Framework: The lawsuits seek court declarations that state gambling laws are "unconstitutional and invalid" if applied to prediction markets.

Suggested Considerations

• *For CFTC-Registered Prediction Market Operators:
• *Immediate Compliance Monitoring: Continue operating under CFTC registration while monitoring court proceedings; do not unilaterally cease operations in affected states pending injunction decisions.
• *Legal Coordination: Engage counsel to coordinate with CFTC enforcement efforts and provide evidence of compliance with federal registration requirements.
• *Documentation Preservation: Maintain comprehensive records demonstrating compliance with the Commodity Exchange Act and CFTC regulations to support the federal preemption argument.
• *State-Level Engagement: Respond to any outstanding cease-and-desist letters through counsel; do not ignore state enforcement communications, but assert federal preemption defenses.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9208-26
• [2] espn.com/espn/betting/story/_/id/48379446/cftc-sues-arizo...
• [3] lowenstein.com/news-insights/newsletters/fintech-five-apr...

What Changed

• - End of "regulation by enforcement": CFTC Enforcement will focus solely on policing fraud, abuse, and manipulation under existing CEA anti-fraud provisions, avoiding policy-setting via enforcement...
• Five explicit enforcement priorities: 1. Insider trading, with strong emphasis on prediction markets (e.g., misappropriation of nonpublic information violates CEA). 2.
• New cooperation policy advisory (forthcoming soon): Includes "significant changes" to declination policy, building on prior frameworks like mitigation-credit matrices and safe harbors for...

Suggested Considerations

• Enhance surveillance: Implement robust monitoring for insider trading in prediction markets, manipulation in energy, disruptive trading, retail fraud signals, and AML/KYC red flags; prioritize misappropriated nonpublic info detection.
• Update policies: Revise insider trading protocols to align with CEA anti-fraud provisions; train staff on prediction market risks (debunking "no insider laws apply" myth).
• Strengthen cooperation readiness: Develop self-reporting/escalation processes, remediation plans, and documentation for declination credit under forthcoming policy; review prior CFTC advisories (e.g., 2025 mitigation matrix).
• Conduct gap analysis: Audit AML/KYC programs for willful violations; assess exposure in priority markets (energy, prediction/crypto, retail).
• Monitor updates: Subscribe to CFTC Press Room for cooperation advisory and related actions (e.g., Feb 25, 2026 Prediction Markets Advisory post-enforcement cases: https://www.cftc.gov/PressRoom/PressReleases/9185-26).

Key Dates

References

• [1] steel-eye.com/news/north-american-regulatory-priorities-f...
• [2] cftc.gov/sites/default/files/CFTC_FY2026_Presidents_Budge...
• [3] cohenmilstein.com/cftc-priorities-modernization-harmoniza...
• [4] beneschlaw.com/insight/ftc-enforcement-trends-in-2026-wha...
• [5] foley.com/insights/publications/2026/01/shifting-enforcem...
• [6] cftc.gov/PressRoom/PressReleases/9185-26
• [7] ftc.gov/news-events/news/speeches/enforcement-priorities-...

What Changed

• - Permanent Injunction: Peken Global is barred from future violations, specifically prohibiting U.S. participants from direct trading on its electronic trading and order-matching system without FBOT...
• Civil Penalty: $500,000 payment required; no disgorgement sought due to cooperation in CFTC investigation and related criminal proceedings (United States v. Flashdot Limited, et al., No.
• Dismissals: Voluntary dismissal with prejudice of all claims against Mek Global Limited, PhoenixFin PTE Ltd., and Flashdot Limited; dismissal of CFTC complaint counts II-V against Peken Global,...
• No new broad regulatory rules, but underscores CEA violations for off-exchange commodity futures, leveraged retail transactions, and unregistered FCM/SEF/DCM operations.

Suggested Considerations

• Verify Registration Status: Foreign platforms must confirm CFTC registration as FBOT if offering direct access to U.S. participants for futures/swaps/derivatives; implement geo-blocks or KYC to exclude U.S. users.[1 from provided content]
• Restrict U.S. Access: Proactively block U.S. IP addresses, require attestations of non-U.S. residency, and monitor for circumvention.
• Pay Penalties: Peken Global must remit $500,000 civil penalty per court order.
• Enhance Supervision/CIP: Implement effective customer identification programs (CIP) and supervision of activities, avoiding off-exchange leveraged retail commodity transactions.
• Monitor Affiliates: Dissolved entities (e.g., Mek Global, PhoenixFin) or non-operational parents (Flashdot) should ensure no residual U.S. exposure.

Key Dates

References

• [1] fintrac-canafe.canada.ca/new-neuf/nr/2025-09-25-eng
• [2] cftc.gov/LawRegulation/EnforcementActions/index.htm
• [3] cftc.gov/PressRoom/PressReleases/8884-24
• [4] cftc.gov/PressRoom/PressReleases/9185-26
• [5] fxnewsgroup.com/forex-news/regulatory/cftc-reengages-in-d...
• [6] usaherald.com/cftc-mek-global-settlement-nears-in-kucoin-...
• [7] opensanctions.org/entities/us-cftc-2ab1ed098a80f19db560f5...
• [8] jdsupra.com/legalnews/doj-and-cftc-bring-charges-against-...

What Changed

• The CFTC FAQs address implementation questions arising from two prior staff positions:
• Tokenized Collateral Guidance (CFTC Staff Letter 25-39): Established the framework allowing futures commission merchants (FCMs) and designated contract markets (DCMs) to accept digital assets as...
• No-Action Position (CFTC Staff Letter 26-05): Provided temporary relief permitting FCMs to accept payment stablecoins, Bitcoin, and Ether as customer margin collateral, subject to specific...
• How registered entities should operationalize tokenized collateral acceptance
• Compliance with notification and operational risk management requirements

Suggested Considerations

• *Immediate (0–30 days):
• *Asset Classification Audit: Map every crypto asset in your portfolios, products, or platforms against the five-category framework (digital commodities, digital collectibles, digital tools, stablecoins, digital securities) established in the March 17 joint interpretation.
• *Investment Contract Review: Identify any assets subject to active issuer promises of essential managerial effort—those remain securities regardless of category and cannot be treated as digital commodities.
• *FAQ Implementation Review: Obtain and review the full CFTC FAQs (available at https://www.cftc.gov/PressRoom/PressReleases/9200-26) to identify specific operational questions relevant to your entity type.
• *Notification Protocol Establishment: If relying on the no-action relief for tokenized collateral, establish procedures to notify the CFTC of significant operational, system, or cybersecurity issues affecting digital asset collateral use (required for first three months of relief).

Key Dates

References

• [1] sec.gov/newsroom/press-releases/2026-30-sec-clarifies-app...
• [2] consumerfinancialserviceslawmonitor.com/2026/02/cftc-and-...
• [3] klgates.com/Crypto-in-2026-The-Democratization-of-Digital...
• [4] genfinity.io/2026/03/17/sec-cftc-final-rule-digital-commo...
• [5] compliance-risk.com/sec-cftc-joint-crypto-asset-interpret...
• [6] cftc.gov/csl/26-09/download
• [7] sec.gov/files/rules/interp/2026/33-11412.pdf
• [8] fintechweekly.com/news/sec-bitcoin-ether-solana-digital-c...

What Changed

This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements. It reaffirms existing CEA prohibitions on fraud in retail forex transactions (CEA Section 6(c)(1) and Regulation 180.1), CPO/CTA fraud, and related violations, with penalties triple the monetary gain and permanent injunctions. The judgment highlights judicial emphasis on exploiting vulnerable communities, such as non-English-speaking groups reliant on advisors.

Suggested Considerations

• Conduct gap analyses of retail forex, CPO, and CTA operations for fraud risks, especially in customer communications and targeting vulnerable groups.
• Enhance disclosures, suitability assessments, and recordkeeping to demonstrate non-reliance exploitation.
• Review parallel criminal risks (e.g., wire fraud, money laundering) and coordinate with counsel for SEC/DOJ exposure.
• Implement training on CEA Sections 4k, 4m, 4n, and Regulations 5.2-5.18 for retail forex; ensure CPO/CTA exemptions are valid.
• Monitor for restitution collection, noting CFTC caution on defendant insolvency.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9195-26
• [2] cftc.gov/PressRoom/PressReleases/9185-26
• [3] gibsondunn.com/the-cftc-advises-prediction-market-users-i...
• [4] paulweiss.com/insights/client-memos/cftc-chairman-outline...
• [5] cftc.gov/PressRoom/PressReleases?c=1006400&page=7
• [6] cftc.gov/PressRoom/PressReleases/9194-26
• [7] cftc.gov/PressRoom/PressReleases/9192-26
• [8] foley.com/insights/publications/2026/01/shifting-enforcem...

What Changed

• This ANPRM proposes no immediate changes, as it is an early-stage consultation seeking input on:
• Application of Commodity Exchange Act (CEA) core principles and existing CFTC regulations to prediction markets.
• Criteria for prohibiting event contracts deemed contrary to the public interest (e.g., potentially sports, politics, or sensitive topics like government employee outcomes).
• Cost-benefit analyses for regulating prediction markets. It builds on prior actions, including withdrawal of a 2024 proposed ban on certain event contracts and a 2025 staff advisory on sports-related...

Suggested Considerations

• Submit comments: Affected parties should prepare and file written comments within 45 days via the CFTC Public Comments Portal, addressing ANPRM questions on CEA principles, prohibited contracts, and costs/benefits.
• Monitor developments: Track Federal Register publication, related litigation (e.g., state challenges to CFTC jurisdiction), and CFTC Enforcement Division advisories. (https://www.cftc.gov/PressRoom/PressReleases/9183-26)

Key Dates

References

• [1] bakermckenzie.com/en/insight/publications/2026/02/united-...
• [2] paulweiss.com/insights/client-memos/cftc-chairman-outline...
• [3] corporatecomplianceinsights.com/cftc-withdraws-proposed-r...
• [4] quickreads.ext.katten.com/post/102mkjy/know-the-outcome-d...
• [5] cftc.gov/PressRoom/PressReleases/9183-26
• [6] cftc.gov/PressRoom/PressReleases/9185-26
• [7] next.io/news/regulation/cftc-chief-signals-imminent-predi...

What Changed

This announcement introduces no new regulatory rules, requirements, or statutory changes; it is a personnel appointment reshaping enforcement leadership. Chairman Selig highlighted Miller's role in refocusing the Enforcement Division on "policing fraud, abuse, and manipulation rather than setting policy," potentially signaling reduced pursuit of novel legal theories and a narrower enforcement scope.

Suggested Considerations

• Review internal controls for fraud, manipulation, and abusive trading, prioritizing digital asset activities (e.g., derivatives, prediction markets).
• Assess exposure from Miller's past cases (e.g., BitMEX, ICOs, Ooki DAO) and strengthen defenses against similar enforcement theories.
• Monitor CFTC enforcement dockets and coordinate with counsel experienced in CFTC/SEC/DOJ matters for upcoming investigations.
• Update training on "core" violations (fraud, abuse, manipulation) to align with stated enforcement focus.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9187-26
• [2] mexc.com/news/837224
• [3] cryptorank.io/news/feed/8787a-cftc-enforcement-director-d...
• [4] gtlaw.com/en/professionals/m/miller-david-i
• [5] mexc.co/en-NG/news/836686
• [6] hoodline.com/2026/03/ex-cia-prosecutor-to-run-cftc-s-cryp...

What Changed

• The advisory does not introduce new rules but rather reaffirms existing CFTC enforcement authority over prediction markets and clarifies the scope of prohibited conduct:
• Insider trading/misappropriation: Trading based on material nonpublic information obtained through a breach of fiduciary duty or pre-existing duty of trust and confidence (Section 6(c)(1) of the...
• Fraud and manipulation: Use of manipulative schemes or artifices to defraud, including trading in contracts where the trader has direct or indirect influence over the outcome
• Pre-arranged and wash trades: Noncompetitive trading under Section 4c(a)(1) and (2)(A) and Regulation 1.38(a)
• Disruptive trading practices: Violations under Section 4c(a)(5) The advisory demonstrates the CFTC's commitment to enforce these prohibitions on prediction market platforms, reinforcing that...

Suggested Considerations

• *For Prediction Market Platforms (DCMs):
• *Implement robust surveillance systems to detect trading by individuals with material nonpublic information or direct/indirect influence over contract outcomes
• *Establish clear trading prohibitions in exchange rules addressing:
• Trading in contracts where the trader has influence over the outcome
• Trading based on material nonpublic information obtained through breach of duty

Key Dates

References

• [1] jdsupra.com/legalnews/cftc-files-amicus-brief-urging-3494...
• [2] mlex.com/mlex/articles/2446145/us-cftc-issues-prediction-...
• [3] gibsondunn.com/derivatives-legislative-and-regulatory-wee...
• [4] hklaw.com/en/insights/publications/2026/02/prediction-mar...
• [5] cftc.gov/PressRoom/PressReleases
• [6] cftc.gov/PressRoom/PressReleases/9158-26
• [7] heinrich.senate.gov/newsroom/press-releases/heinrich-urge...

What Changed

• - Withdrawal of the June 10, 2024, Notice of Proposed Rulemaking titled “Event Contracts,” which proposed prohibiting political event contracts as contrary to public interest (e.g., akin to war or...
• Withdrawal of CFTC Staff Letter 25-36 (issued Sept. 30, 2025), a Staff Advisory cautioning designated contract markets (DCMs) against offering sports event contracts due to litigation risks and state...
• Commitment to new event contracts rulemaking based on a "rational and coherent interpretation of the Commodity Exchange Act" to promote innovation, with clear standards for prediction markets; CFTC...

Suggested Considerations

• Review and disregard prior compliance programs built around the 2024 proposal or 2025 advisory (e.g., cease preparations for prohibiting political/sports contracts).
• Monitor CFTC docket for new event contracts rulemaking notice and provide comments during any future consultation period.
• Assess current offerings for event contracts under existing Commodity Exchange Act prohibitions (e.g., gaming, manipulation); document reliance on CFTC's innovation stance pending new rules.
• Evaluate litigation exposure, especially state gaming regulator actions; prepare for potential CFTC intervention asserting exclusive jurisdiction.
• No immediate prohibitions lifted or mandates imposed—continue operating within current CEA framework (e.g., anti-fraud, market integrity).

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9179-26
• [2] corporatecomplianceinsights.com/cftc-withdraws-proposed-r...
• [3] en.bloomingbit.io/feed/news/105447
• [4] binance.com/en-KZ/square/post/02-05-2026-cftc-withdraws-p...
• [5] cohenmilstein.com/cftc-priorities-modernization-harmoniza...
• [6] zwillgen.com/gaming/cftc-signals-new-era-for-prediction-m...
• [7] cftc.gov

What Changed

The enforcement actions establish precedent in three critical areas: Market Manipulation (Spoofing): The CFTC secured consent orders against precious metals futures traders for spoofing—placing and canceling orders to create false market impressions. The orders impose three-year and six-month trading bans and require cease-and-desist compliance with the Commodity Exchange Act's spoofing prohibition. Misappropriation and Fictitious Trading: The CFTC obtained permanent injunctive relief requiring disgorgement of unlawful gains ($135,788) plus civil penalties ($200,000), with 18-month trading...

Suggested Considerations

• *For Registered Futures Firms and Banks:
• trade and post-trade compliance controls
• *For Commodity Pool Operators and Investment Advisors:
• by-jurisdiction licensing analyses before soliciting investors
• *For All Market Participants:

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9168-26
• [2] jdsupra.com/legalnews/states-step-up-enforcement-of-crypt...
• [3] cftc.gov/LawRegulation/EnforcementActions/index.htm
• [4] foley.com/insights/publications/2026/01/shifting-enforcem...
• [5] lowenstein.com/news-insights/newsletters/crypto-brief-jan...
• [6] cftc.gov
• [7] cohenco.com/knowledge-center/insights/january-2026/cftc-n...
• [8] cftc.gov/PressRoom/PressReleases

What Changed

The CFTC has obtained federal court orders imposing civil monetary penalties and trading bans on individuals and firms for spoofing and misappropriating confidential information. The CFTC has also charged an unregistered commodity pool operator with fraud and registration violations.

Suggested Considerations

• Verify registration with the CFTC at NFA BASIC before committing funds
• Review and update anti-spoofing and anti-fraud policies and procedures
• Ensure compliance with CFTC regulations regarding commodity pool operations and futures market participation

Key Dates

Related Regulations

What Changed

The final rule introduces the following substantive amendments: Exceptions for Swaps Intended to be Cleared (ITBC Swaps) Swap dealers and major swap participants are exempted from certain External Business Conduct Standards and swap trading relationship documentation requirements when executing swaps that are intended by the parties to be cleared contemporaneously with execution.

Suggested Considerations

• *Immediate Actions (Pre-Implementation)
• *Implementation Actions (Upon Effective Date)
• trade disclosure systems to remove PTMMM generation and delivery requirements
• based operations, review implications of superseded Staff Letter No. 23-01
• *Ongoing Compliance

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9157-25
• [2] cftc.gov/media/12866/federalregister121825/download
• [3] isda.org/2025/11/18/isda-and-sifma-comment-on-cftc-propos...
• [4] gibsondunn.com/derivatives-legislative-and-regulatory-wee...
• [5] sifma.org/advocacy/letters/revisions-to-business-conduct-...
• [6] skadden.com/insights/publications/2025/09/cftc-proposes-e...

What Changed

• This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements. It reinforces longstanding CEA and CFTC rules on:
• Mandatory registration as a Commodity Pool Operator (CPO) and Associated Persons (APs) for pools trading commodity futures (CFTC Regulation 4.13 exemptions do not apply here due to fraud and public...
• Prohibitions on fraud, misrepresentations, guarantees of profit, non-disclosure of risks, commingling funds, and operating pools as non-separate entities (CEA Section 4o, Regulations 4.20, 4.21).
• Compliance with prior CFTC orders barring trading or registration-required activities.

Suggested Considerations

• Verify registration: Check CFTC/NFA BASIC database before engaging with pools or advisors; unregistered status warrants avoidance.
• Implement controls: Segregate pool funds (Regulation 4.20), avoid commingling, disclose risks fully, prohibit profit guarantees/misrepresentations, and issue accurate statements.
• Conduct due diligence: Screen principals for prior CFTC orders; cease activities if barred.
• Train staff: On fraud red flags (e.g., Ponzi payments, high-yield promises) and report suspicions via CFTC hotline (866-FON-CFTC) or online tip form.
• For SEC-registered advisers: Evaluate eligibility for CFTC Letter 25-50 relief to avoid dual registration while ensuring pools limit to qualified eligible persons (QEPs).

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9140-25
• [2] cftc.gov/PressRoom/PressReleases/9168-26
• [3] sidley.com/en/insights/newsupdates/2025/12/us-commodity-f...
• [4] ropesgray.com/en/insights/alerts/2025/12/cftc-provides-in...
• [5] cftc.gov/PressRoom/PressReleases/9160-25
• [6] haynesboone.com/news/alerts/cftc-no-action-letter-provide...
• [7] cftc.gov/LawRegulation/EnforcementActions/index.htm
• [8] alston.com/en/insights/publications/2025/12/cftc-registra...

What Changed

This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements. It reaffirms existing CEA prohibitions on fraud, including Section 6(c)(1), 7 U.S.C. § 9(1), and 17 C.F.R. § 180.1(a)(1)-(3), covering material misrepresentations, omissions, and deceptive schemes in precious metals sales.

Suggested Considerations

• Conduct immediate fraud risk assessments on precious metals sales scripts, disclosures, and pricing markups to ensure no material misrepresentations or undisclosed overcharges.
• Enhance senior investor protections, including suitability reviews, cooling-off periods, and training on vulnerable customer targeting bans.
• Review controlling person policies for good faith oversight, documenting supervisory failures to avoid personal liability.
• Audit parallel SEC/CFTC exposures in commodity-linked activities, preparing for offset calculations in multi-agency actions.
• Update compliance manuals with this case as precedent for CEA fraud in physical commodities; monitor whistleblower notices for internal reporting incentives.

Key Dates

References

• [1] cftc.gov/PressRoom/PressReleases/9139-25
• [2] cftc.gov/media/12781/enfSafeguardMetalsLLCDecision093025/...
• [3] whistleblower.gov/notices/2025-015
• [4] oag.maryland.gov/News/Pages/Office-of-Maryland-Attorney-G...
• [5] nasaa.org/77724/states-cftc-final-judgment-precious-metal...
• [6] cftc.gov/media/12776/enfSafeguardMetalsLLCJudgementOrder0...
• [7] securities.utah.gov/2025/10/17/utah-division-of-securitie...
• [8] finance.idaho.gov/department-of-finance-cftc-and-29-state...