CFTC Issues Cryptocurrency Advice to Businesses
- The US Commodity Futures Trading Commission regulates cryptocurrency products as commodities.
The US Commodity Futures Trading Commission has issued an advisory notice regarding cryptocurrency products.
Specifically, the agency's Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) have offered CFTC-registered exchanges "guidance for listing virtual currency derivative products," according to an official release dated 21.5.2018.
What this means is advice on how to comply with CTFC rules when listing financial derivatives based on cryptocurrency. The information deals with a number of areas that require special attention. These are enhanced market surveillance, close coordination with CFTC staff, trade reporting, and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term and governance.
The notice explains that cryptocurrency has been considered a commodity under US law since 2015, and is thus subject to the Commodity Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Act as enforced by the CFTC.
"CFTC staff generally believes that the advisory should help exchanges and clearinghouses effectively and efficiently discharge their statutory and self-regulatory responsibilities, while keeping pace with the unique challenges of emerging virtual currency derivatives," it reads.
The agency has been active in shutting down illegal operations, but it also allows its employees to trade cryptocurrency as long as their activities are above board. Chairman J. Christopher Giancarlo became popular amongst cryptocurrency fans in February when he made positive comments on the subject at a congressional hearing.
DMO Director Amir Zaidi said: “The CFTC staff is committed to providing regulatory clarity as much as possible. As the virtual currency market continues to evolve, CFTC staff will seek to provide additional guidance to help market participants keep pace with innovation while complying with CFTC regulations.”
DCR Director Brian Bussey said: “CFTC staff is providing this information, in part, to aid market participants in their efforts to design risk management programs that address the new risks imposed by virtual currency products. In addition, the guidance is designed to help ensure that market participants follow appropriate governance processes with respect to the launch of these products.”
The US Commodity Futures Trading Commission has issued an advisory notice regarding cryptocurrency products.
Specifically, the agency's Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) have offered CFTC-registered exchanges "guidance for listing virtual currency derivative products," according to an official release dated 21.5.2018.
What this means is advice on how to comply with CTFC rules when listing financial derivatives based on cryptocurrency. The information deals with a number of areas that require special attention. These are enhanced market surveillance, close coordination with CFTC staff, trade reporting, and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term and governance.
The notice explains that cryptocurrency has been considered a commodity under US law since 2015, and is thus subject to the Commodity Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Act as enforced by the CFTC.
"CFTC staff generally believes that the advisory should help exchanges and clearinghouses effectively and efficiently discharge their statutory and self-regulatory responsibilities, while keeping pace with the unique challenges of emerging virtual currency derivatives," it reads.
The agency has been active in shutting down illegal operations, but it also allows its employees to trade cryptocurrency as long as their activities are above board. Chairman J. Christopher Giancarlo became popular amongst cryptocurrency fans in February when he made positive comments on the subject at a congressional hearing.
DMO Director Amir Zaidi said: “The CFTC staff is committed to providing regulatory clarity as much as possible. As the virtual currency market continues to evolve, CFTC staff will seek to provide additional guidance to help market participants keep pace with innovation while complying with CFTC regulations.”
DCR Director Brian Bussey said: “CFTC staff is providing this information, in part, to aid market participants in their efforts to design risk management programs that address the new risks imposed by virtual currency products. In addition, the guidance is designed to help ensure that market participants follow appropriate governance processes with respect to the launch of these products.”