Onchain, in court: What happened in crypto legal news this week
Written by Turner Wrightstaff writerReviewed by Sam Bourgistaff writerThe CFTC ordered a trading ban for former Alameda and FTX executives, and US prosecutors opposed a motion from a US soldier accused of profiting from the removal of Nicolas Maduro.
Former Alameda Research and FTX executives receive 5-year trading bans
On Tuesday, the US District Court for the Southern District of New York (SDNY) entered consent orders related to a 2022 enforcement action against former Alameda Research CEO Caroline Ellison and crypto exchange FTX co-founder Zixiao “Gary” Wang.
The orders imposed by the US Commodity Futures Trading Commission (CFTC) required that Ellison and Wang receive a five-year trading ban related to their roles in the crypto exchange’s collapse. The CFTC also ordered that the Alameda CEO receive a 10-year registration ban, while Wang received an eight-year registration ban.
According to CFTC enforcement director David Miller, the orders reflected Wang’s and Ellison’s “material assistance in the Commission’s FTX-related investigations.” The civil case is separate from criminal cases involving the misuse of customer funds at FTX, in which Ellison was sentenced to two years in prison and Wang received time served.
US prosecutors file opposition to Polymarket trader over $400,000 Maduro bet
On Wednesday, lawyers representing the US government in SDNY filed their opposition to a motion to dismiss from Gannon Ken Van Dyke, a US soldier who allegedly made more than $400,000 using event contracts on prediction market platform Polymarket using nonpublic information. Van Dyke was tied to the military operation that removed Venezuelan President Nicolás Maduro in January.
Related: Judge stays CFTC’s case against US soldier over prediction market bets
The US soldier’s motion to dismiss, filed on July 31, included claims that the Commodity Exchange Act, at the center of three of the charges he faces, was “ambiguous” in treating event contracts as “swaps” under the CFTC’s purview. In its Wednesday filing, the US government argued that Van Dyke “advances hypotheticals, edge cases, and ongoing litigation over state gaming laws” that were unnecessary to decide in order to move forward with the case.
“Van Dyke’s motion asks the Court to make a factual determination not appropriate at the motion-to-dismiss stage,” said SDNY Deputy US Attorney Sean Buckley. “His argument relies on speculative assertions about facts, based on improper inferences from the Indictment and incorrect conclusions about the nature of the charge, to claim that facts do not amount to ‘property.’”
As of Friday, the court had not posted any decision on the motion to the public docket.
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