Financial Markets and Funds special counsel Gary DeWaal spoke with The Wall Street Journal on some of the takeaways from the Commodity Futures Trading Commission's (CFTC) recent enforcement action against FTX Trading, Alameda Research and Sam Bankman-Fried. Among other basis for exercising jurisdiction, the CFTC alleged that the defendants committed fraud in connection with the sale of commodities (i.e., virtual currencies) in interstate commerce. Gary noted, "If you are impacting commodities in interstate commerce, the CFTC believes it has a jurisdictional hook." He suspects FTX will ultimately decide to settle with the CFTC rather than pursue a costly defense in light of its bankruptcy status. Now that FTX has hired John J. Ray III to handle its bankruptcy, Gary stated, "It is not in the interest of the trustee to use attorneys' fees defending something like this."
"FTX Fraud Suits Offer Blueprint for Pursuing Offshore Crypto Exchanges," Wall Street Journal, December 14, 2022
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