FIT21 would provide regulatory certainty for the US digital asset ecosystem, balancing support for innovation with consumer protection.

By Yvette D. ValdezStephen P. WinkAdam Fovent, and Deric Behar

On May 22, 2024, the US House of Representatives (the House) passed H.R. 4763, the Financial Innovation and Technology for the 21st Century Act (FIT21), with a good measure of bipartisan support: 279 votes in favor (208 Republicans and 71 Democrats) and 136 votes opposing (three Republicans

The legislation allows decentralized autonomous organizations to gain legal entity status and operate within the bounds of applicable law.

By Jenny Cieplak, Stephen P. Wink, Daphne Lambadariou, and Deric Behar

On March 7, 2024, Wyoming Governor Mark Gordon signed into law a new legal framework for decentralized autonomous organizations (DAOs), allowing them to be recognized as “decentralized unincorporated nonprofit associations” (DUNAs). The Wyoming Decentralized Unincorporated Nonprofit Association Act (the Act) was adopted with bipartisan support, reflecting Wyoming’s

Understanding NFTs as commodities calls for a more nuanced analysis than what their “non-fungible” label might suggest at first glance.

By Yvette D. Valdez

The appropriate regulatory characterization of cryptocurrencies and digital assets for US legal purposes has spawned many pages of analysis and occupied many hours of industry, law firm, and regulatory consideration. Significant amounts of commentary, and later government and judicial attention, have been devoted to determining whether fungible cryptocurrencies and digital assets constitute securities for purposes of

The viability of DAO structures draws attention after a judge declares that a decentralized autonomous organization is a “person” under the law.

By Nima H. Mohebbi, Yvette D. ValdezStephen P. WinkDouglas K. Yatter, Peter Trombly*, Adam Zuckerman, and Deric Behar

On June 8, 2023, the US District Court for the Northern District of California granted the Commodity Futures Trading Commission (CFTC) a default judgment against Ooki DAO, a decentralized autonomous organization (DAO) that the CFTC charged in September 2022 with three violations of the Commodity Exchange Act (CEA).

The proposed bill sets forth a comprehensive framework for the digital asset ecosystem by bridging regulatory gaps, promoting innovation, and protecting consumers.

By Jenny Cieplak, Marlon Q. Paz, Yvette D. Valdez, Stephen P. Wink, Adam Zuckerman, and Deric Behar

On June 2, 2023, Patrick McHenry, Chairman of the House Financial Services Committee, and Glenn Thompson, Chairman of the House Committee on Agriculture, published a discussion draft of legislation (the Proposed Bill) that seeks to close regulatory gaps and provide a “functional framework” for digital asset regulation in the US. Unlike several other proposed crypto-focused laws around the world, most notably MiCA in the EU, this Proposed Bill largely draws on existing legal frameworks and standards rather than creating an entirely new regime specifically for regulating cryptoassets.

The Proposed Bill grants regulatory authority to the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) and clarifies the jurisdictional scope between the two agencies. The CFTC would be granted explicit authority over spot market digital asset commodities, while the SEC would maintain authority over digital assets offered as part of an investment contract (i.e., securities). And while the Proposed Bill would exclude payment stablecoins from the definition of digital commodity under the Commodity Exchange Act (CEA), the CFTC would still be granted jurisdiction over transactions in payment stablecoins “as if” they were digital commodities when transacted on a CFTC-registered entity.

Representatives McHenry and Thompson have stated that their goal in publishing the Proposed Bill is “to strike the appropriate balance between consumer protection and encouraging responsible innovation.” They have also indicated their intention to formally introduce the Proposed Bill on the House floor in early July 2023.

Cases filed in the past year by the DOJ, CFTC, and SEC represent a new phase in the US government’s digital asset enforcement efforts.

By Douglas K. Yatter, Matthew Valenti, and Deric Behar

Expanding beyond their earlier focus on registration and compliance violations and retail fraud, enforcement agencies have also begun to address other types of conduct involving digital assets. One such area is market manipulation. In the past year, the Department of Justice, the Commodity Futures Trading

The Financial Services Committee seeks to bring order to an industry many say has suffered from lack of proper rulemaking.

By Stephen P. WinkNima H. Mohebbi, and Deric Behar

On January 12, 2023, incoming House Financial Services Committee Chair Patrick McHenry established a new subcommittee on digital assets, financial technology, and inclusion. Rep. French Hill will chair the subcommittee, while Rep. Warren Davidson will serve as its vice-chair.

According to Rep. McHenry, the subcommittee will:

  • provide federal

The plan directs the agency to develop a robust regulatory framework to prevent market misconduct, as SEC officials’ public comments keep advancements in technology high on the agenda.

By Marlon Q. Paz, Stephen P. Wink, Donald Thompson, and Deric Behar

On August 25, 2022, the Securities and Exchange Commission (SEC) published a draft Strategic Plan (the Plan) for fiscal years 2022–2026. The Plan focuses on three goals that, according to SEC Chairman Gary Gensler, advance the SEC’s

The latest bipartisan crypto bill would give the CFTC new tools and authorities to regulate digital commodities, with a focus on market integrity and consumer protection.

By Yvette D. Valdez, Adam Fovent, and Deric Behar

On August 3, 2022, a bipartisan group of US senators[1] introduced the Digital Commodities Consumer Protection Act of 2022 (the Bill). The Bill is the latest legislative proposal seeking to bring clarity to digital asset markets and the allocation of regulatory responsibility

The CFTC would take center stage in the regulation of spot digital asset markets under Title IV of the RFIA.

 By Yvette D. Valdez, Adam Bruce Fovent, and Emily Viola

Latham & Watkins presents a blog series on the Responsible Financial Innovation Act, which was introduced in the US Senate on June 10, 2022, to create a framework for digital assets, cryptocurrency, and blockchain technology. This third post in the series covers CFTC and commodities regulatory issues.

Title IV of the Responsible Financial Innovation Act ( RFIA) is arguably the keystone of the proposed regulatory framework and would make various amendments to the Commodity Exchange Act (CEA), ultimately giving the Commodity Futures Trading Commission (CFTC) principal regulatory authority over digital asset markets.