Latest news with #CarolinePham
CNBC
4 days ago
- Business
- CNBC
Tron to go public after U.S. halts legal action against founder Justin Sun: CNBC Crypto World
On today's episode of CNBC Crypto World, bitcoin and ether rebound after last week's pullback. Plus, Tron founder Justin Sun prepares to take his company public in the U.S. through a reverse merger. And, Caroline Pham, commissioner at the CFTC discusses what should be next for the regulator as she prepares to step down from the agency.
Yahoo
12-06-2025
- Business
- Yahoo
Acting CFTC chair discusses future of crypto regulation under Trump
The Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline Pham sits down with Yahoo Finance executive editor Brian Sozzi at Coinbase's State of Crypto Summit to speak more on digital asset regulation under the Trump administration, protecting investors from fraud, and the legitimacy of prediction markets. Pham previously served as the CFTC commissioner from April 2024 until January 2025. President Trump's nominee for CFTC chairman, Brian Quintenz, has yet to be confirmed. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Well, Bitcoin briefly bounced back today following remarks from President Trump at Coinbase's State of Crypto summit. In a pre-recorded message, Trump touted himself as the first crypto president and promised to make the United States a global leader in crypto. Yahoo Finance executive editor Brian Sai had the chance to sit down with Commodity Futures Trading Commission Chairman Caroline Pham with what could be ahead for the crypto industry and the future of the CFTC with upcoming chairman Brian Quintes. Take a listen. I'm so excited for Brian and for him to come and bring his leadership to the CFTC, and that's exactly why I wanted to make sure that we were able to do that spring cleaning and make sure that Ryan is able to hit the ground running when he comes in as permanent chairman, hopefully very soon. So I think it's going to be fantastic, you know, he's had a very clear record as a commissioner that speaks for itself, and I'm looking forward to it. The CFTCmight get more responsibility for regulating digital assets under do you say to the crypto balls that would say things are going to be easy sledding regulatory wise over the next 4 years or under the Trump administration? Is it be careful what they wishfor? Uh, there is no easy street for anybody, and the regulators aren't easy. So just because we are pro-innovation and pro-growth does not mean that you're going to be able to get away with breaking the law. And this is where I'm talking about not twisting the law to criminalize an asset class or a technology, but I'm talking cheating, and stealing. I gave a speech in 2022 where I said, there's, you, you can never commit fraud. Never. You can never steal from people. You can never lie to people. You can never cheat victims, right? And so that's what I've been pleased we've been able to do is end the regulation by enforcement be able to refocus our limited resources, time and attention on catching fraudsters and scammers in our markets, which we have done for decades. That's always been our core mission is to prevent fraud, manipulation and abuse in our markets and to help victims. You know, a lot of times the CFTC fraud enforcement actions that were actually unrecoverable, right? We were going after fly by night foreign countries where we knew from the beginning we were never going to be able to recover any money for victims and they weren't who were these victims in the first place we never had any of that identified, but we'd say, oh look, it's a $500 million judgment. But that's just on paper. We didn't actually help anybody. There's plenty of poor people out there, people who have been taken advantage of, people who have been unfairly treated, they've been victimized, they've been here in the United States and we need to be stepping in and using our authorities to make sure that they're getting actual recoveries. So that's actually one of the KPIs that I put into place is to measure the actual recoveries that we've gotten and what's been distributed to victims, not just looking at a big dollar sign of a, you know, fictional judgment that we'll never collect. Along those lines, you also said on your panel, and I want to get your thoughts a little more on have to uberize crypto. What did you mean by that? So one of the things that people have been really concerned about, right, is that the, uh, the last administration, um, particularly with the SEC and the CFTC really went beyond what the law says and what the statute says. Many of my dissents as a commissioner on our enforcement actions pointed out how we were laws that have applied to the Doritos markets to futures and to swaps for decades, and this applies to the traditional markets. I'm not even talking about crypto. I'm talking about the interest rate swap market, the biggest, deepest, most liquid rates market in the world. I'm talking about the FX market. These things are critically important for companies all over the world and American companies to manage their risk associated with being multinational corporations, with makingPayroll and however many different currencies and however many different countries around the world, um, for the US government as well. So when we start to change the rules for actual, uh, the 700 trillion notional global dirdos markets because we're trying to be creative and um flex it to go after, uh, what we perceive to be a bad or know, crypto or or blockchain, that is really breaking the fabric of our global markets. I feel this so strongly, and so that's why I've had all those assets. All of those things were the existing laws on the books. That's our existing statute, those are the existing rules. The last administration ignored that. They ignored it to go and pursue novel enforcement theories, about the unintended consequences of what that would do for the global economy and for global markets. So that's why many of these staff letters that I talked about have focused on restoring the well settled legal precedents, how the CFTC has applied and interpreted the law for decades to restore that regulatory clarity. So what does that mean? That means no matter law says somebody in the future can come along and ignore it. How do you make sure that that doesn't happen? And, uh, one of the things I said on my panel is that when something becomes, uh, so big, so accepted, so part of our lives, you can't really take it away then. The public, the people, voters, they won't let you. And so that's what I meant because, you know, a lot of people tried to fight everybody had Uber in their pocket. People liked Uber. Uber did a lot of things to revolutionize the transportation so even when people tried to uh ban Uber, they could. And so that's what I think is actually if you want to talk about how do we make sure that crypto never gets uh unfairly criminalized as just a concept, as a technology. I'm not talking about, um, again, fraud. Fraud is always are criminals that deserve to be caught and punished and held accountable, so that's not what I'm talking about, talking about just as a concept or as a technology trying to criminalize them. The way that you do that is by bringing it to the people, and the people will speak and voters speak. Before I let you go, the people have also spoken, and they seem to like prediction markets. Now I've talked to Robin UCO Vladov numerous times, and he has told me we want to get big into prediction is already big in prediction markets. Should these markets exist? Prediction markets have existed forever. If you want to think about what some of the first futures contracts are actually about, it's about predicting the weather. If you're a farmer, it's really important that you know if it's gonna rain or not prediction markets have existed before, you know, our current organized futures markets ever did. This goes back, I'm sure hundreds, thousands of years, maybe even just imagine when the world was a barter economy and what people were doing back in the day, exist. They're real, right? And, uh, it's precisely because of things like weather derivatives that we've always had these prediction markets and, uh, in CFTC, um, regulations. Um, we, you know, we call them event contracts, uh, to use more of a And so what I think is super informative and about the value of these markets and why they're important and why I try to reopen uh the comment period on a very thoughtful 2008 concept release. So the CPC has been looking at this like for 30 years, right?Because the first no action letter that the CFTC did around prediction markets was actually in the 90s and then we did this concept release in 2008. Now, unfortunately, I don't have a majority on the commission and sadly, you know, due to partisan reasons, just reopening a comment period to get the public, right, from all members of the public who could have weighed in and said, do they think these things are good or bad, and what are the important considerations that we need to think about as regulators to be responsible about this innovation that got blocked, so I wasn't able to do that. That's that's very unfortunate, but um, the 2008 comment letters really focused on the information of prediction markets, right? You're, they're, they're information markets. What's the most valuable commodity in the world, particularly if you look into the future and you think about Gen AI. The most valuable commodity in the world is probably information, real information, true information. So if you can use market forces, the self-policing, self enforcing market mechanisms to divine what is real and what is not, that's what an information market does. And I think one of the key at in the CFTC's statute is that the national public interest, which is very clear, Congress very clearly laid out a public interest for us, it is to have these uh national markets that provide, uh, price risk management, price discovery, and price that's exactly what markets do. Markets use pricing mechanisms of the markets to disseminate information. Every time you look at a stock price, you have taken all of the information available about that company, about its revenues, its cash flows, its product, its management, its strategy, its capital investments, the entire, you know, chapter and verse, A to Z of that company is expressed through its stock price, through the power of markets. So it's the same thing.
Yahoo
12-06-2025
- Business
- Yahoo
Acting CFTC chair discusses future of crypto regulation under Trump
The Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline Pham sits down with Yahoo Finance executive editor Brian Sozzi at Coinbase's State of Crypto Summit to speak more on digital asset regulation under the Trump administration, protecting investors from fraud, and the legitimacy of prediction markets. Pham previously served as the CFTC commissioner from April 2024 until January 2025. President Trump's nominee for CFTC chairman, Brian Quintenz, has yet to be confirmed. To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
Forbes
27-05-2025
- Business
- Forbes
CFTC's Failure To Enforce ‘Gaming' Contract Ban Could Still Upend Kalshi Sports Betting Lawsuits
(Photo by Mario Hommes/DeFodi Images via Getty Images) By its own admission, Kalshi is offering a sports betting product – across all 50 states. Kalshi has repeatedly advertised its sports-event contracts on social media as 'The First Nationwide Legal Sports Betting Platform'; 'Betting on Kalshi, the first app for legal sports betting in all 50 states'; and 'Sports Betting Legal in all 50 States on Kalshi." (see here and here). Not only does the federal Wire Act criminalize that activity – as it constitutes the interstate transmission of bets or wagers through interstate commerce – but the CFTC's own regulation (Rule 40.11(a)(1)) prohibits the offering of event contracts involving or relating to 'gaming.' Rule 40.11(a)(1) imposes a blanket ban on all event contracts involving 'gaming,' 'war,' 'terrorism,' 'assassination,' and 'activity that is unlawful under State or Federal Law.' The inclusion of the italicized word 'Prohibition' at the outset of the Rule is a dead giveaway. As explained by acting CFTC Chair Caroline D. Pham: Incoming CFTC Chairman Brian Quintenz has likewise acknowledged that Rule 40.11(a)(1) imposes a 'blanket prohibition' on any event contract that involves or relates to 'gaming.' In a May 24, 2021 public appearance before the Federalist Society, then-Commissioner Quintenz was asked whether the CFTC 'is required to prevent the listing of a contract that's considered gambling.' Quintenz's response: 'the regulation we wrote requires us to.' Several months earlier, Commissioner Quintenz wrote that if an event contract 'is found to be an enumerated event contract, then it is subject to the per se prohibition in the regulation.' Or, as he bluntly put it, 'under Regulation 40.11, that means game over.' Kalshi has already conceded that its sports-event contracts involve 'gaming.' In a court document filed last year in its lawsuit with the CFTC, Kalshi asserted that 'the only relevant legislative history . . . confirms that contracts on 'sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament' were precisely what Congress had in mind as 'gaming' contracts.'' The 'gaming' category, Kalshi advised the court, 'reaches contracts contingent on games – for example, . . . whether a certain team will win the Super Bowl. It thus functions as a check on attempts to launder . . . sports gambling through the derivatives markets.' (Notably, Kalshi also asserted that 'Congress did not want sports betting conducted on derivatives markets,' adding that 'contracts relating to games have no inherent economic significane" and 'are unlikely to serve any 'commercial or hedging interest'' — a position which is fundamentally at odds with its current litigation posture). At the January 17, 2025 oral argument before the D.C. Circuit – which occurred just six days before it filed its self-certification for sports contracts with the CFTC – Kalshi reaffirmed that 'the legislative history is exclusively about sports when it talks about 'gaming,'' declaring that 'Congress was particularly concerned at the time it enacted this statute about sports betting and that was probably what they were getting at with the word 'gaming.'' (49:50-50:08). Tying Rule 40.11(a)(1) to the Preliminary Injunction Factors If Rule 40.11(a) categorically bans 'gaming' contracts and Kalshi's sports-event contracts fall within that prohibited category, then why isn't it 'game over' for Kalshi in the federal courts? Kalshi has attempted to evade this inquiry by confining its federal court lawsuits against Maryland, Nevada, and New Jersey to a single constitutional question – i.e., whether state sports betting laws are 'preempted' by the Commodity Exchange Act's grant of exclusive jurisdiction to the CFTC over all derivatives contracts traded on CFTC-designated exchanges. According to Kalshi, any inquiry over Rule 40.11(a)(1)'s applicability falls outside the scope of the constitutional question presented, and, in any event, 'reaffirms' the CFTC's exclusive jurisdiction over Kalshi's contracts because only the CFTC can enforce its own regulations. Contrary to Kalshi's assertion, Rule 40.11(a)(1) is relevant for several reasons. First, Kalshi itself has injected Rule 40.11(a)(1) into the lawsuits by alleging that its sports-event contracts are 'lawful under federal law.' Further, Kalshi's Head of Markets, Xavier Sottile, submitted a declaration in support of each one of Kalshi's motions for preliminary injunction attesting that Kalshi 'assiduously complied with federal regulations with regard to all of our contracts.' The unique procedural posture of the case also warrants a broader lens. Kalshi is asking the federal courts to grant it the extraordinary remedy of a preliminary injunction – which is essentially an early victory before there is even a trial. To obtain a preliminary injunction, Kalshi must demonstrate the following: (1) a likelihood of success on the merits; (2) a likelihood of suffering irreparable harm in the absence of preliminary relief; (3) that the balance of equities weighs in its favor; and (4) that injunctive relief is in the 'public interest.' In assessing these factors, the reviewing court can consider a broader range of documents and information, including matters outside the four corners of the complaint. The Fourth Circuit (which covers the Maryland federal courts) has stated that a court ruling on a preliminary injunction motion 'may look to, and indeed in appropriate circumstances rely on, hearsay or other inadmissible evidence when deciding whether a preliminary injunction is warranted.' It does not require much ingenuity to tie Rule 40.11(a)(1) to the various preliminary injunction factors. It's pretty straightforward. The one that immediately jumps out is the 'public interest' prong which is so central to the granting of preliminary injunctive relief. Failure to Enforce Rule 40.11(a)(1) is Contrary to the Public Interest Kalshi may have raised the specter of Rule 40(a)(1) – yet again – in its motion papers filed in the Maryland case. At page 19 of its motion for preliminary injunction, Kalshi contends that the 'public interest' prong of the preliminary injunction standard favors Kalshi because 'the public undoubtedly has an interest in seeing its governmental institutions follow the law.' Ironically, the 'governmental institutions' that Kalshi was calling out with that statement were the Maryland state agencies for not recognizing the preemptive effect of federal law. What an unforced error. If there is any government institution which 'failed to follow the law,' it would be the CFTC, which failed to enforce its own regulation – Rule 40.11(a)(1). As noted above, Rule 40.11(a)(1) prohibits event contracts that involve, relate to or reference 'gaming.' With Kalshi already on record as equating sports-event contracts with 'gaming,' the CFTC was compelled by its own regulation to order Kalshi to discontinue the listing or trading of its sports-event contracts. After all, the CFTC has already determined – through formal rulemaking unanimously approved more than a decade ago – that event contracts involving or 'relating to' gaming are automatically 'contrary to the public interest' without any further public interest review. There is no discretion or wiggle room afforded to the CFTC under Rule 40.11(a)(1). It's a per se prohibition, as acknowledged by both Commissioners Pham and Quintenz. While Kalshi (and others) have argued that Rule 40.11 gives the CFTC the discretion to apply an individualized 'public interest' test to proposed event contracts on a 'case-by-case' basis, the plain language of the Rule squarely refutes that. To that point, Acting Chairman Pham declared in 2022 that 'there is no further public interest test in Rule 40.11(a)(1) . . . . The Commission has no discretion to infer an additional case-by-case public interest test under Rule 40.11(a)(1) because the plain meaning of . . . the rule text is clear and unambiguous.' In other words, it's 'game over' (to use Quintenz's football analogy). I would think that's a pretty pertinent consideration on a motion for a preliminary injunction analysis, which requires consideration of the 'public interest.' Here, the public interest would clearly be disserved by the CFTC's failure to enforce Rule 40.11(a)(1). As several Maryland federal district courts have recognized, 'there is a substantial public interest 'in having governmental agencies abide by the federal laws that govern their existence and operations.'' And the 'public interest' points only one way – at least until Rule 40.11(a)(1) is amended or withdrawn. Until such time, Kalshi's sports-event contracts are barred by Rule 40.11(a)(1). So, if, as Kalshi insists in its motion, there is a strong 'public interest' in ensuring that governmental institutions 'follow the law,' one would expect the State of Maryland (and Judge Abelson) to take note of the CFTC's abject failure to enforce Rule 40.11(a)(1). In doing so, the Court is not being asked to 'enforce' Rule 40.11(a)(1) against the CFTC (as Kalshi argues in its reply brief). Rather, the Court is simply being asked to consider the CFTC's failure to enforce Rule 40.11(a)(1) in the context of Kalshi's motion for preliminary injunction, with an eye towards examining whether granting an injunction to Kalshi would serve the public interest where its sports contracts are barred both by a federal statute (the Wire Act) and by a clear and unambiguous agency rule which the CFTC refuses to enforce. That's well within the Court's purview on a motion for preliminary injunction. Irreparable Harm Negated by Contract Illegality Along the same lines, the illegality of sports-event contracts under both the Wire Act and Rule 40.11(a)(1) undercuts Kalshi's claim of 'irreparable harm' – another prong of the preliminary injunction inquiry. There cannot be any standing to sue – much less 'irreparable harm' – if Kalshi's contracts are not 'lawful.' (Kalshi has alleged that its contracts are 'lawful under federal law' and submitted a declaration attesting to its 'compliance with' CFTC regulations – placing the lawfulness of its contracts under federal law squarely at issue in this litigation). Here, any irreparable harm that Kalshi may have suffered is entirely of its own making. It self-certified its sports-event contracts as being 'in compliance' with CFTC regulations at a time when such contracts were barred by a specific CFTC regulation and just two weeks after was ordered by the CFTC to suspend the listing of its sports contracts pursuant to the same regulation. Instead of seeking preclearance from the CFTC (as it could have done), Kalshi plunged full speed ahead despite its prior acknowledgement in the CFTC case that sports-event contracts involved 'gaming' (or, more specifically, sports betting), have 'no inherent economic significance,' are 'unlikely to serve any 'commercial or hedging interest,'' and conceding that 'Congress did not want sports betting conducted on derivatives markets.' Federal courts have rejected claims of irreparable harm based on the illegality of the underlying contract, characterizing the moving party's quandary as 'a bed largely of its own making' and calling the request for injunctive relief in such circumstances 'ill-suited.' False certification to the CFTC constitutes 'unclean hands' Another way to weave Rule 40.11(a)(1) into the preliminary injunction proceedings is through an 'unclean hands' defense. The doctrine of 'unclean hands' bars equitable relief 'when the party seeking relief is guilty of fraud, unconscionable conduct, or bad faith directly related to the matter at issue that injures the other party and affects the balance of equities.' It all ties back to Kalshi's January 23rd self-certification regarding its initial listing of a sports-related event contract. On page 4 of that document, Kalshi made an affirmative representation that its proposed sports-related event contract 'complies with' the CFTC Regulations. CFTC Regulation 40.11(a)(1) places a blanket prohibition on any event contract that 'involves, relates to, or references' any of the following: 'terrorism, 'assassination,' 'war,' 'gaming,' or an 'activity that is unlawful under any State or Federal law.' In other words, event contracts relating to 'gaming' are per se prohibited under Rule 40.11(a)(1). As a frequent applicant before the CFTC (going all the way back to 2020), Kalshi should be well aware of this Rule, especially since it's prominently displayed on the CFTC's website and Commissioner (and now acting CFTC chair) Caroline D. Pham specifically referred to Rule 40.11 (a)(1)'s blanket prohibition in public statements about Kalshi's prior event contracts. In a letter dated April 1, 2025, U.S. Congress member Dina Titus asked the CFTC to 'consider whether Kalshi made false claims in its self-certification,' in light of Kalshi's prior judicial statements to the effect that sports-based event contracts 'would qualify as prohibited activities under the Commodity Exchange Act and applicable federal regulations.' As a remedy for the alleged 'false statement,' Congresswoman Titus has asked the CFTC 'to stay the trading of [Kalshi's] sports event contracts' while it investigates the matter. States can likewise weaponize the allegedly false statements made in Kalshi's 'self-certification' by arguing to the federal courts that Kalshi is not entitled to a preliminary injunction because it comes to a court of equity with 'unclean hands.' Here, a state could argue that Kalshi has 'unclean hands' (and therefore is ineligible for a preliminary injunction) because it misrepresented to the CFTC that its sports-related event contracts comply with CFTC Regulations, with full knowledge that CFTC Rule 40.11(a)(1) prohibits event contracts relating to 'gaming' and after having previously asserted in prior judicial proceedings that the 'gaming' category includes sports-based event contracts (like the ones at issue here). Further, the alleged misrepresentation concerning sports-related event contracts is directly related to the matter at issue since it involves the same subject. As you can see, the CFTC's non-enforcement of Rule 40.11(a)(1) is far from a non-issue. It bears directly on three out of the four elements of a preliminary injunction – including a 'balancing of the equities' – and should enthusiastically be invoked by states faced with such an extraordinary remedy. Two of the most compelling story lines in the entire Kalshi saga are: (1) Kalshi's complete 180 on the legality of sports-event contracts (as compared with its prior position advanced in the CFTC litigation – I can't recall ever seeing a litigant change its story so dramatically in such a short period of time); and (2) the CFTC's failure to enforce its own regulation. These are winning themes that states should be hammering in their court filings.
Bloomberg
21-05-2025
- Business
- Bloomberg
Third CFTC Commissioner to Resign Amid Wave of Departures
Democratic Commissioner Kristin Johnson plans to step down from the Commodity Futures Trading Commission later this year, the latest of several high-profile departures at the regulator. Her exit, depending on its timing, could leave the commission with a single member, with either acting Chair Caroline Pham or CFTC nominee Brian Quintenz at the helm, if he is confirmed by the US Senate before Johnson's exit.
