Court Issues Nationwide Injunction on Corporate Transparency Act
On December 3, 2024, in what was not at all surprising, a Texas court issued a preliminary injunction blocking enforcement and staying the compliance date of the Corporate Transparency Act (CTA). The Court found that the CTA is unconstitutional as outside of Congress’s power.
A full discussion of the CTA is included below. The Texas court found that the CTA represents a federal attempt to monitor companies created under state law and eliminates the corporate anonymity feature designed by states charged with regulating corporate formation – both in violation of the U.S. Constitution and its explicit separation of powers.
The court’s opinion is strongly written, determining that the government could not justify the constitutionality of the law, regardless of every attempt. In particular, the Plaintiff’s contend that CTA violates: (i) the Ninth and Tenth Amendments by intruding on State’s rights; (ii) the First Amendment by compelling speech and burdening individuals’ rights of association; and (iii) the Fourth Amendment by
The CFTC And Cryptocurrencies
The SEC and U.S. Commodity Futures Trading Commission (CFTC) have been actively policing the crypto or virtual currency space. Both regulators have filed multiple enforcement actions against companies and individuals for improper activities including fraud. On January 25, 2018, SEC Chairman Jay Clayton and CFTC Chairman J. Christopher Giancarlo published a joint op-ed piece in the Wall Street Journal on the topic.
Backing up a little, on October 17, 2017, the LabCFTC office of the CFTC published “A CFTC Primer on Virtual Currencies” in which it defines virtual currencies and outlines the uses and risks of virtual currencies and the role of the CFTC. The CFTC first found that Bitcoin and other virtual currencies are properly defined as commodities in 2015. Accordingly, the CFTC has regulatory oversight over futures, options, and derivatives contracts on virtual currencies and has oversight to pursue claims of fraud or manipulation involving a virtual currency traded in interstate commerce. Beyond instances of fraud
