By Bracewell.
On October 2, 2024, the Commodity Futures Trading Commission (CFTC), the US Department of Justice (DOJ), and the Securities and Exchange Commission (SEC) announced[1] parallel prosecutions charging a carbon credit project developer and several of its former officers with fraud in connection with the issuance of voluntary carbon credits (VCCs) through a scheme to fraudulently inflate the number of VCCs issued for a number of the developer’s projects.
These first cases against VCC fraud signal both the government’s intent to go after suspected fraud in VCC markets and a willingness to show leniency toward companies that promptly self-report fraud, remediate the harm, and cooperate in the government’s investigation. The circumstances described in the cases will likely stimulate renewed attention by project developers,  VCC certifiers and registries on the standards and methods for internal controls and due diligence in the issuance and qualification of VCCs for sale.
